Apple Inc. (AAPL) and SAMSUNG ELECT LTD(F) (SSNLF)’s Growth Slows Down

According to Han-Joong Kim, Samsung’s VP of Mobile Planning, SAMSUNG ELECT LTD(F) (NASDAQOTH:SSNLF) expects smartphone sales shipments to outpace the broader smartphone market growth in the third quarter, led by a wider range of mid to low end models. “We think that smartphones as a percentage of our total mobile handset portfolio is likely to exceed 70%,” he said in the earnings call.

“Entering into a typically strong season for the IT industry, we expect earnings to continue to increase,” Robert Yi, Samsung’s senior vice president and head of investor relations, said in a statement. “However, we cannot overlook delayed economic recovery in Europe and risks from increased competition for smartphones and other set products.”

Smartphone Market Data

In the second quarter, worldwide smartphone shipments showed 52.3% year-over-year growth, according to data compiled by IDC. Vendors shipped 237.9 million smartphones, compared to 216.3 million in the first quarter and 156.2 million a year ago. Apple and Samsung lost market share to LG, Lenovo, ZTE and other handset makers that offered lower-priced handset models in high-growth countries such as China and India.

Source: Bloomberg

Samsung remained the world’s largest smartphone maker based on shipments of 72.4 million units (+43.9% YoY), accounting for 30.4% market share, down from 32.2% a year earlier. Strong Galaxy S4 shipments and regional growth in North America and China improved the company’s smartphone demand and sales for the quarter.

Apple shipped 31.2 million units and captured 13.2% market share, the lowest in the three years, down from 16.6% a year earlier. Samsung’s domestic rival LG Electronics gained 5.1% market share on shipments of 12.1 million units, compared to 5.8 million units and 3.7% share a year ago. China-based Lenovo and ZTE gained 4.7% and 4.2% market share, respectively.

Bottom line

Samsung may experience sluggish growth for its high-end smartphone shipments in the third quarter as its mobile business expands into the mid to low-end smartphone market. Margins are expected to stay flat or decline slightly as it aims to bolster its market share in the emerging markets with cheaper smartphones. Samsung, unlike Apple Inc. (NASDAQ:AAPL), has been more responsive in the mid to low-end smartphone segment, but IDC expects Apple’s brand presence and sales growth to accelerate if it launches a lower-cost iPhone into the market.

The article Apple and Samsung’s Growth Slows Down originally appeared on Fool.com and is written by Christopher DeSousa.

Christopher DeSousa has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Christopher is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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