A smartphone giant is present in every market Samsung participates in, competing with Samsung in all price segments, even using the same product strategy. And that is not Apple or Huawei.
Referring to the era when smartphones started to take the throne, many people will surely think of the “Samsung vs. Apple” war. Two giants of the mobile industry – a pioneer in changing the concept of mobile phones, a pioneer in popularizing smartphones to everyone – have once dragged each other to court to convince each other of infringing creative rights. As the allegations subsided, Samsung maintained its No. 1 position in market share; Apple ranked No. 2.
Then, in a country dubbed the factory of the world, a third force appeared. Huawei, a conglomerate that has been “proclaiming” in smartphones, has accelerated enormously in the smartphone field since 2013 until now. In 2018, Huawei deposed Apple’s No. 2 positions, and by 2019, it was far from Apple with a distance of 47 million devices (Strategy Analytics).
It is not difficult to understand when referring to “rivals,” many people will immediately think of Apple and Huawei. But, if you look closely, they will realize that the person who makes the big guy worried is not the two chasings behind.
Why not? Take a look at the world’s best-selling smartphone rankings for the past year. There are five high-end smartphones in the list of 10 devices named Counterpoint, and all five are called iPhone. Samsung occupies 4 of the remaining five positions, and the most expensive of these (Galaxy A50), when launched in Vietnam, has a starting price of less than 8 million.
In other words, Samsung may have lagged Apple in overall smartphone sales but lost out in the premium segment. Even the A10, which starts at less than 3 million, has lower sales than the iPhone XR ($ 750 in the first nine months) and iPhone 11 (starting at $ 700). None of the Galaxy S10 or Note10 models make it to the top, and that also means that they don’t make as much as a third of the iPhone XR in the year.
Nearly any data in the past suggests Apple is the king of the premium segment. Samsung probably knows that competing with Apple in this segment does not bring any value. Anyway, the Korean giant is still an unrivaled Android king. With the Galaxy S20, the Korean giant has decided not to launch the S10e and start the “regular” S10 at $ 1,000, directly facing the iPhone 11 Pro. This seemingly “extravagant” decision is quite logical: if it loses revenue in any case, it is better to set a high price to maximize profits.
What about Huawei? By the end of 2019, the gap between Huawei and Samsung has become smaller than ever. Huawei has never hidden its ambition to replace Samsung in the No. 1 position, even in the face of a US ban.
But that ban changed all that: losing the right to partner with Google, Huawei / Honor smartphones no longer have Google apps/services installed. While sales have grown because of the “back effect”, Huawei is becoming more dependent on its home market than ever when China accounted for 60% of its sales. As users gradually realize they will not live without Gmail, YouTube, Google Search, Google Maps, etc., Huawei’s international market share will continue to evaporate as what has just happened in Vietnam or India.
In return, Huawei crushed all competitors in China when it held a market share of 35% in the fourth quarter. This makes Samsung no longer need to worry about Huawei anymore: from the end of 2017 to the present, the Korean giant’s market share in China is only about 1%.
You may have noticed an interesting fact: Despite the fierce chase behind it, both Apple and Huawei are hardly considered direct competitors of Samsung. Apple alone dominates the high-end segment. Samsung is vital in the remaining parts. Huawei is the supremacy in China and is also blocked internationally. Samsung has nothing in China and holds the No. 1 position in many other countries.
So who deserves a headache for Samsung? The answer is BBK Electronics, an electronics company from Guangzhou, China, with many sub-brands: OPPO, Vivo, OnePlus, Realme, and iQoo. In total, the three largest BBK brands, OPPO, Vivo, and Realme, sold 259 million smartphone units in 2019 (Counterpoint data). This puts BBK ahead of both Huawei and Apple and is very close to Samsung’s 296.5 million marks.
Sales alone are not enough to say that BBK threatens Samsung, but its smartphones are a direct competitor to Samsung in every way. For example, in the mid-range and low-price segments, both Samsung and OPPO smartphones, Vivo does not devalue configuration, instead of showing off the camera and experience. In the high-end part, the OnePlus can be considered the Android brand most often compared to the Galaxy S, specially when Huawei has been tied to the Chinese market. Xiaomi has nothing but configuration. Through the Reno, Find X (OPPO), or NEX (Vivo) lines that have been promoted in the last two years, BBK did not hide its ambition to gradually occupy the pie of the Galaxy S and Galaxy Note.
Another equally important factor is the potential. Because only racing configuration on a single sub-brand Realme, it is almost sure that BBK will not have to accept “pathetic” profitability indicators like Xiaomi. This gives BBK the ability to create many surprises in the future, similar to what it has done with Realme and iQoo in the past year.
Most importantly, despite the enormous potential, BBK is not constrained by the US government like the current Huawei or ZTE before. Which markets Samsung has, OPPO and Vivo will also be in the top 5. The OnePlus sub-brand is freely launching in the US and Europe. If you’re looking to buy Android smartphones with Google services, buyers will always bring the Galaxy and a specific type of BBK smartphone on the scale.
Entering the era of 5G, the war between the two real domination of the global smartphone market will be more and more fierce. Samsung may have stood firm against Apple and Huawei, but is it possible to beat an opponent that can be considered “Samsung of China” like BBK? Let’s wait and see.
Source: GenK
