Samsung smartphones in some segments now cost less than Huawei's, which had been viewed as a cheap alternative until quite recently. The reason is that Samsung is increasingly targeting low-end developing markets as the technology matures.

According to U.S. market researcher Strategy Analytics on Thursday, the average price of a Samsung smartphone was US$225 in the fourth quarter of last year, the second lowest among the top 10 handset makers.

Huawai's average price was $243. This is the first time Samsung has been overtaken by Huawei in terms of price. Even OPPO phones cost more than Samsung ones at $231. Apple phones were the most expensive at $786, followed by also-rans Sony, HTC and BlackBerry. Apart from Apple, the other players whose phones cost more than Samsung’s all had a much smaller sales volume.

The figure is the wholesale price smartphone makers charge telecoms, and is used to gauge product competitiveness and brand image.

Huawei CEO Richard Yu introduces new smartphones at a media event in Paris on Tuesday. /Reuters-Yonhap

Huwawei has been quickly expanding its premium market share around the world focusing on Europe. Last year, it rolled out the premium P20 and Mate 20 series. It sold 16 million P20s and more than 5 million Mate 20s around the world last year. But its sales in the U.S. were minimal.

Meanwhile Samsung's Galaxy S9 and Note 9 series suffered the lowest sales ever of new premium products, resulting in a weaker position in the segment.

Some industry watchers believe Huawei has already surpassed Samsung in terms of premium market share in Europe, and staff at the Korean giant fear that excessive promotional activities last year to maintain market share and an aggressive shift to cheaper handsets may have cost the company its valuable brand image.

Huawei wants to beat Samsung to the world No. 1 spot this year. Last year Samsung's annual smartphone sales dropped below 300 million units while Huawei's surpassed 200 million for the first time. Huawei focuses on premium phones in Europe and cheaper handsets in China, Southeast Asia and Latin America.

"If Samsung fails to make a radical turnaround this year, it could end up losing to Chinese rivals like Huawei in terms of sales, earnings and brand image in the global market in one or two years," an industry insider warned.