'Samsung Hit Hard by 27% Plunge, Expects to Smile in Second Half... Anticipates 'Anti-China' Windfall'

[Asia Economy Reporter Seulgina Jo] Samsung Electronics, which recorded nearly a 30% decline in sales in the global smartphone market in the second quarter, is expected to benefit from so-called 'anti-China' reflex gains in the second half of the year. U.S. sanctions targeting Chinese brands such as Huawei and the intensified anti-China sentiment in India triggered by border clashes are expected to benefit Samsung Electronics, a competitor. The overall smartphone market in the third quarter is also expected to recover by double digits compared to the previous quarter.

◆Samsung Electronics hit hard in Q2...largest decline among top 5 companies

According to a report released on the 25th (local time) by market research firm Gartner, Samsung Electronics suffered the greatest impact from the COVID-19 pandemic among the top five global smartphone sellers in the second quarter.

During this period, Samsung Electronics' smartphone sales recorded 54.759 million units, down 27.1% compared to the same period last year. Although it maintained the number one sales position, the decline was the largest among the top five companies. Its global market share also fell below 20% to 18.6%. The gap with second-place Huawei was only 0.2 percentage points.

In contrast, China's Huawei showed a relatively smaller decline compared to Samsung Electronics and even increased its global market share. Huawei's sales in the second quarter were 54.125 million units, down 6.8% year-on-year, with a market share up 2.7 percentage points to 18.4%. Other Chinese brands Xiaomi and Oppo recorded sales declines of 21.5% and 15.9%, respectively.

This sales decline was the result of travel restrictions, offline store closures, and reduced consumption worldwide due to the spread of COVID-19. Global smartphone sales in the second quarter fell 20.4% year-on-year to 295 million units. Anshul Gupta, senior researcher at Gartner, explained, "During the COVID-19 pandemic, travel was restricted and stores were closed. Spending on non-essential consumer goods also became cautious, leading to a consecutive decline in smartphone sales for two quarters this year." However, among the top five companies, Apple's sales declined by only 0.4%.

◆Market 'rebound' in the second half with recovery to 300 million units... Samsung leads with Galaxy Note20, expected to benefit from anti-China sentiment

The smartphone market is expected to rebound significantly in the third quarter. Another market research firm, TrendForce, forecasts that global smartphone production in the third quarter will increase by 17.2% compared to the previous quarter, recovering to around 335.2 million units. This is due to the easing of restrictions in various countries and ongoing economic stimulus policies compared to the second quarter, which was severely impacted by the COVID-19 pandemic. TrendForce's estimated 16.7% decline in global smartphone production in Q2 is less severe than Gartner's estimate.

By company, Samsung Electronics, which recently unveiled the Galaxy Note20 series, is expected to expand its market share. Samsung is anticipated to benefit from U.S. sanctions against China and anti-China sentiment in India, achieving a market share of 23.5%, up 4.3 percentage points from the previous quarter. In contrast, China's Huawei, which was around 18%, is expected to fall to 14.0%, surrendering more than 4 percentage points compared to the previous quarter. Apple (13.3%), Xiaomi (11.5%), Oppo (11.8%), and Vivo (8.2%) are expected to follow in that order.

Following the bloody clashes in the Himalayan border area in June, Chinese companies such as Xiaomi and Huawei, which had almost dominated the world's second-largest smartphone market, India, have been severely hit, and Samsung Electronics is expected to take their place, according to ongoing analyses. Earlier, when the state-run telecommunications company canceled contracts with Chinese telecom equipment companies such as Huawei and the Indian government banned 59 Chinese applications including TikTok and Weibo, the industry anticipated that Chinese smartphone manufacturers would be the next target.

Samsung Electronics also accelerated its market share expansion by launching four new mid-to-low-end smartphones in the Indian market?Galaxy M01, M11, A31, and A21S?shortly after. Launching four new products in a single market within a month is considered very unusual. Market research firm IDC analyzed that Samsung Electronics ranked first with a 24% share in the entire Indian mobile phone market (smartphones + feature phones) in the second quarter.

The Trump administration's offensive targeting Huawei is also expected to intensify ahead of the U.S. presidential election. This will inevitably pose obstacles to the activities of Chinese brands including Huawei in the global smartphone market. Huawei plans to release its second foldable phone, the Mate X2, in the second half of the year. Unlike the Mate X, which folds outward ('outfolding'), the Mate X2 is expected to adopt an inward folding ('infolding') design similar to Samsung Electronics' foldable phones.

This content was produced with the assistance of AI translation services.