Samsung releases Galaxy S8 into Chinese market
Samsung Electronics (005930.KS) is releasing it new flagship Galaxy S8 smartphone line into the Chinese market on May 25 after a showcase event today, as it moves to make up share lost to Chinese brands. While sources differ significantly as to Samsung’s share of the Chinese smartphone market, it is far below the current leaders. Back in 1Q 2014 Samsung was the share leader in the Chinese smartphone market with a 19.9% share, but even by 1Q 2015, that share had fallen to 9.7%, behind Apple (AAPL) (14.7%), and Chinese brands Xiaomi (pvt) (13.7%) and Huawei (pvt) (11.4%), and last year Samsung fell out of the top five category altogether, although not alone as Apple has also fell prey to mainland brands that have provided ‘almost’ fully featured smartphones at lower cost.
While Samsung has seen early success with the S8 selling over 10 million units since its April 21 release, the challenges of the Chinese market are ongoing, with relative newcomers Oppo (pvt) and Vivo (pvt) taking share from Xiaomi, the original Chinese smartphone ‘interloper’ to take top spots, and Huawei in 3rd place. While Chinese smartphone buyers are the most aggressive when it comes to buying new technology (such as the curved edges of the Galaxy series), they are also very price conscious, and have come to accept local brands as equal to, in value, with premium brands produced outside of China. Samsung’s momentum is strong for the S8 but Chinese brands compare well to non-Chinese premium brands, even outperforming in some categories, while selling for less than half of premium brand levels. Samsung has built out its smartphone line to compete in the mid-range Chinese market, but has found the terrain to be far more difficult than hoped.
While Samsung has seen early success with the S8 selling over 10 million units since its April 21 release, the challenges of the Chinese market are ongoing, with relative newcomers Oppo (pvt) and Vivo (pvt) taking share from Xiaomi, the original Chinese smartphone ‘interloper’ to take top spots, and Huawei in 3rd place. While Chinese smartphone buyers are the most aggressive when it comes to buying new technology (such as the curved edges of the Galaxy series), they are also very price conscious, and have come to accept local brands as equal to, in value, with premium brands produced outside of China. Samsung’s momentum is strong for the S8 but Chinese brands compare well to non-Chinese premium brands, even outperforming in some categories, while selling for less than half of premium brand levels. Samsung has built out its smartphone line to compete in the mid-range Chinese market, but has found the terrain to be far more difficult than hoped.
Chinese Smartphone Market Shipments - 1Q 2017/1Q 2016 - Source: Counterpoint Research
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