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Tuesday, 05 August 2014 11:04

Samsung loses top spot to Xiaomi in China smartphone race Featured

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The Xiaomi M4 The Xiaomi M4

Korean tech giant Samsung has lost its prized position as China's top smartphone manufacturer after it held the number one title for two years, according to new statistics.

In the second quarter of 2014 Chinese tech firm Xiaomi overtook Samsung to become the country's largest smartphone maker with 14% market share.

Samsung held on to the second spot, with a 12% share, slightly ahead of third place Lenovo, outshipping it by 200,000 units.

The Korean electronics giant had previously been China's leading smartphone maker since 2012's first quarter, said Wang Jingwen, an analyst with Canalys. At the time, the company's market share was 22%. Most of Samsung and Xiaomi's devices run Google's Android operating system.

Wang said aggressive pricing is largely the key - the company has already sold 26.1 million phones in this year's first half, with the goal of selling a total of 60 million by the end of this year.

And, as we reported last week the company is currently the fifth-largest smartphone vendor in the world, according to data from Strategy Analytics.

This marks the first time the Chinese company has taken the top spot in China, after only starting to sell phones three years ago. Xiaomi’s point of difference is its high-end devices, which boast features like quadcore processors, 5-inch displays and 3GB of RAM selling far cheaper than traditional rivals like the iPhone.

Its latest high-end device for example, the Xiaomi Mi 4, sells for a retail price of US$322, compared to Samsung's Galaxy line and Apple's iPhones, which sell for hundreds of dollars more.

In China, Samsung sells a large range of handsets, from high end to low, and benefits from a strong brand and a vast reseller network. It also sells a $13 wearable fitness band.

Xiaomi's low-end series of phones, known as Redmi, are also a key driver behind the company's shipment numbers, which reached almost 15 million in the second quarter in China, according to Canalys. The Redmi phones can start as low as 699 yuan (US$113).

The company isn't yet a big name outside of China but Xiaomi is expanding to ten foreign markets this year - including Malaysia, the Philippines, India, Indonesia, Brazil and Turkey - though not Australia yet.

Last year Xiaomi hired a Google executive, Hugo Barra,, who was a vice president for Google’s Android division. 

Samsung last week reported a tough second quarter for its mobile devices as operating profits dropped 25%. The company also warned that the second half of 2014 "will remain a challenge," as competition in the mobile market leads to lower device prices.

"In the mid-to-low end segment, Samsung devices have not represented great value for money in China," analyst Wang Jingwen said, adding the country's largest mobile carrier, China Mobile, is also partnering more with domestic handset makers to launch phones built for its new 4G network.

For more information on Xiaomi check out its website.

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