Apple overtakes Samsung as the world’s biggest smartphone maker

Apple has officially overtaken Samsung as the world’s biggest smartphone maker, selling more phones in the Christmas quarter than any other brand thanks to rising demand in China.

The US company sold 74.8m smartphones, just ahead of Samsung’s 73m units, analysis firm Gartner said.

Apple’s iPhone sales were up almost 25m on the same period last year, driven by an explosion in demand from China that helped push its profits to a record $18bn (£11.8bn) in the final quarter.

Apple has long outsold Samsung by value, but its new dominance by volume spells trouble for its South Korean rival, which has been struggling with falling sales and shrinking earnings.

Samsung sold nearly 10m fewer phones than it did in the runup to Christmas 2013, thanks to lacklustre demand for its flagship Galaxy S5 and fierce competition at the lower end of the market.

“Samsung’s performance in the smartphone market deteriorated further in the fourth quarter of 2014, when it lost nearly 10 percentage points in market share,” said Anshul Gupta, principal research analyst at Gartner.

“Samsung continues to struggle to control its falling smartphone share, which was at its highest in the third quarter of 2013. This downward trend shows that Samsung’s share of profitable premium smartphone users has come under significant pressure.”

Chinese firms such as Xiaomi, Huawei and Lenovo, which from a startup in 2010 is now valued at $45bn, have begun to nibble at Samsung’s sales by offering high performance low-cost phones and brands that younger customers increasingly identify with.

Xiaomi has more than doubled its market share in a year to 5%, selling almost 19m units in the final three months of 2014, up from 6m the year before. The firm has already expanded into developing markets including India, Indonesia and Mexico, and is preparing to launch its accessories store in Europe.

Lenovo is in third place with 24m units sold, and Huawei fourth with 21m units.

Samsung is now fighting to avoid the downwards spiral that damaged once profitable mobile phone businesses like Nokia and Blackberry. It responded on Sunday by launching two updates to its flagship phone, the S6 and S6 Edge, which sports an unusual curved screen.

Despite Samsung’s problems, the overall market is still growing. Sales of smartphones to end users grew totaled 1.2bn units in 2014, up 28% from 2013, and these internet enabled devices now represent two-thirds of global mobile phone sales.

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