Fitch predicts Apple & Samsung’s handset marketshare will stagnate
It seems that the Big Two smartphone vendors – Apple & Samsung are going to be facing a very tough future thanks to competition in emerging markets. As a consequence, Fitch Ratings is predicting that local handset makers such as China’s Xiaomi, Lenovo, and Huawei along with India’s Micromax will become the main competitors for Apple and Samsung. Locally manufactured devices retailing at $100 to $300 can offer virtually all of the key features of big brand smartphones. Plus Fitch also believes that the forthcoming iPhone 6 probably won’t do enough to bolster Apple.
Although the iPhone 6 is rumoured to be launching in September  with a larger screen, Apple’s “developments are likely to be incremental rather than revolutionary,” Fitch says.
It continued, “We believe that the innovations – which include curved screens and compatible wearable devices – are unlikely to change the trend facing Samsung and Apple.”
The chief problem the pair face is that India and China together are expected to account for over 60 per cent of growth in smartphone shipment volumes.
Samsung’s and Apple’s global smartphone shipment market share will decline to around 25 per cent and 14 per cent, respectively, by 2015 (2013: 31 per cent and 15 per cent), says Fitch.
According to data from IDC, Xiaomi took the lead in China with 15 million devices with a market share of 15 per cent – ahead of Samsung’s 12 per cent by shipping 13.2 million smartphones.
Fitch continued, “We expect the Big Two’s combined smartphone shipment volume to stagnate at around 450 million-460 million units in 2014 (2013: 467 million), even as the global smartphone market rises by around 20 per cent to 1.2 billion.”
Fitch estimates that smartphones now account for roughly two-thirds of the global handset market, whilst IDC says that global smartphone shipment volumes increased by 5 per cent in 2Q14 to 295 million units (1Q14: 281 million units).
Interestingly, Fitch added, “We believe that the innovations – which include curved screens and compatible wearable devices – are unlikely to change the trend facing Samsung and Apple.”
The fact that Fitch says it doesn’t expect these trends to affect Samsung’s credit rating (A+/Stable) appears to point to the fact that whilst the Big Two might lose their dominance of smartphones, they might be able to replace ‘lost’ smartphone revenues with profits from the emerging wearables market.