Second Half Premium Phone Market Share War: 'Chasing and Counterattacking'

Market Size Expected to Decrease by 3% This Year
Q2 Shipments Down 9%
Apple iPhone 14 Sales
Samsung Foldable Phones Z Flip, etc.
Sales Increase in North America and Europe

[Asia Economy Reporter Lim Hye-seon] To keep or to take away. The premium smartphone war for the second half of this year has begun. Starting with Samsung Electronics, Apple has released its flagship phone, and Chinese brands Huawei and Xiaomi, emphasizing cost-effectiveness, have joined the competition. With forecasts predicting a decline in the smartphone market size compared to last year, competition among manufacturers is expected to intensify.

On the 14th, market research firm Counterpoint Research projected that the global smartphone market this year will shrink by 3% from the previous year to 1.357 billion units. Global smartphone shipments in the second quarter fell 9% year-on-year to 294.5 million units. The second half is expected to see an even larger decline.

Apple

Will Apple's Loyalty Remain Strong?

Apple holds an unshakable first place in the premium smartphone market priced above $400, with a 57% market share as of the second quarter. This is slightly down from 60% the previous year. Samsung follows with a 19% share. The success of the new iPhone 14 in the second half remains uncertain. Analysts point to a strong dollar reducing price competitiveness and a failure in product segmentation strategy.

Guo Mingchi, a Taiwan-based analyst at TF International, stated, "In major markets, pre-order results show that the iPhone 14 Pro and Pro Max performed well, but sales of the base models, iPhone 14 and iPhone 14 Plus, were weaker than their predecessors," adding, "Apple's strategy for the standard models has failed." Sales of the base iPhone models account for about half of total sales.

Pricing policy is also a hurdle. While prices were frozen in the US and China, prices were significantly raised in countries like South Korea and Japan. Domestic prices in South Korea increased by up to 17% compared to the previous generation. The domestic prices for the iPhone 14 start at 1.25 million KRW for the iPhone 14, 1.35 million KRW for the iPhone 14 Plus, 1.55 million KRW for the iPhone 14 Pro, and 1.74 million KRW for the iPhone 14 Pro Max. The highest-spec iPhone 14 Pro Max 1TB model is priced at 2.5 million KRW, up 330,000 KRW (17.4%) from the previous generation.

Ultimately, the loyalty of iPhone users is key. Since a significant portion of loyal customers are in their teens to thirties, some analyses predict sales will increase. NH Investment & Securities forecasts iPhone 14 sales to rise 6.6% year-on-year to 75.5 million units. The iPhone 14 Pro series is expected to sell 47 million units, a 27% increase from last year.

Samsung's Pursuit: Solid Foldable Phone Performance

Samsung Electronics' foldable phones are the only rival to the iPhone. Sales of the Z Flip4 and Z Fold4, released last month, increased compared to their predecessors, mainly in North America, Europe, and Southeast Asia. Especially this year, the high-priced Z Fold4 has received a positive response. The sales ratio between the Z Flip4 and Z Fold4 shifted from 70:30 to 60:40. In the Indian market, a bright sign of success was seen with 50,000 units sold within 12 hours of pre-orders. Samsung Electronics secured over 10,000 stores in India, double the previous year, to expand sales of the Galaxy Z Flip4 and Fold4. Samsung's India branch aims for 150% higher sales in the local premium phone market compared to last year. In South Korea, where pre-orders achieved record-high results, sales continue at a fast pace.

The market evaluates that considering the difficult conditions such as the global economic downturn, the pre-sales of the Z Flip and Fold4 performed quite well. Analysts also attribute this to Samsung freezing prices. Last year, Samsung's foldable phone sales approached 10 million units, driven by the success of the Z Flip3 and Fold3. The industry predicts that Samsung will comfortably exceed 10 million units in annual sales this year with the Z Flip4 and Fold4.

Chinese companies have also sought to expand their global market share with cost-effective flagship phones. Huawei released its top model, the Mate 50, after two years. However, it is equipped with a 4G LTE-supporting AP instead of 5G and its own operating system, Hongmeng, which is expected to reduce its competitiveness in the global market. Xiaomi promoted its foldable phone, the Mix Fold2, released last month, as the world's thinnest foldable phone at 11.2 mm thickness. However, it has received low marks for technical completeness because it cannot maintain an angle when unfolded.

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