- A British analyst firm posts Q1 2018 results of the European smartphone industry.
- The results show Xiaomi’s European market share growing by over 1,000 percent.
- With Xiaomi displacing Samsung in India and blowing up in Europe, it is clearly a force to be reckoned with.
Canalys, a technology market analyst firm based in the U.K., posted its first-quarter 2018 analysis of the European smartphone market this week. There’s the usual news about the current “flagship fatigue,” and some dire predictions for the market going forward.
But, in a chart graphic that displays the top five smartphone vendors in Europe for the beginning of 2018, there’s a pretty notable stat:
That’s no typo. Xiaomi’s growth in Europe in the first quarter of this year is so big that they couldn’t even fit it in the graphic, and simply had to put “>+999%” instead.
Granted, the company is still number four on the list of smartphone vendors, with the incumbents Samsung, Apple, and Huawei, far above it in shipments and market share. But you have to keep in mind that Xiaomi has only been in the European market for a short while. Some European countries, like Spain, just saw their first Xiaomi devices at the end of 2017.
You’ll also notice that both Samsung and Apple’s market share went down in Q1 2018. Where do you think that lost market share is going? To the companies in third, fourth, and fifth place, for absolute sure.
Samsung and Apple both know that Huawei and Xiaomi are gobbling up market share like candy all over the world. Late last year, Xiaomi became the top smartphone vendor in India, knocking Samsung down to second place. There is every reason to believe that Xiaomi (or Huawei) could do the same thing across Europe.
In fact, the only place in the world that Xiaomi is not a threat to Samsung and Apple right now is here in the United States. But that’s only because Xiaomi is unable to sell smartphones here due to trade embargoes. It makes one wonder if Samsung and Apple are working behind-the-scenes to keep those embargoes in place.
If Xiaomi were to be allowed to sell smartphones in the United States, Samsung and Apple would be in big trouble.
Canalys did share some insight into why Xiaomi is able to disrupt the market so much: because it is not a public company. Both Xiaomi and HMD Global (the owner of the Nokia brand of smartphones) are private companies, and therefore do not have to continually raise profits to appease shareholders. That gives both companies the ability to spend way beyond their means to gain market share.
Canalys says that “this is not sustainable in the long term, and both Xiaomi and HMD Global will eventually have to shift their revenue and cost structures, as the top three have now done, toward profitability.”
In other words, Xiaomi is able to spend tons of money now to gain a foothold in the market. But when it goes public (which is right around the corner), it will have to shift to profitability, which will undoubtedly slow its growth.
But until then, Xiaomi likely has Samsung and Apple shaking in their boots.
You can read the full Canalys report here.
May 11, 2018 at 09:21AM