Global Handset Profit Q2 2018: Chinese OEMs Are Fast Catching Up Samsung

Must Read

Windfall! Online Grocery Market In India Looks Set For Purple Patch Ahead

Silver linings are clearly in short supply in the pandemic fuelled world that we have come to...

Apple Store In India: More Of Disappointment Than Excitement?

Apple has started making moves to strengthen its presence in India. With the launch of Apple online...

Facebook’s Chasm Of Distrust: An Ever-Deepening Divide

Facebook, the world's most popular social media platform has failed measurably as it is voted as the...

After years of relative stability, the global mobile handset industry continues to undergo a massive transformation as a recent report from Counterpoint Research shows that the combined handset profit of Chinese brands has shattered the $2 billion barrier in Q2 2018. This marks the highest ever combined net profit achieved by Chinese OEMs in a single quarter.

Global Handset Profit Q2 2018: Apple Is Still the King

According to the report, brands like OPPO, Vivo, Huawei and Xiaomi are leading the relentless Chinese assault on the global smartphone industry, going so far as to threaten the incumbent giants of the industry – Samsung and Apple. Nevertheless, despite all the production difficulties associated with their flagship iPhone X, and a lack of enthusiasm surrounding the lacklustre iPhone 8, Apple continued to be ridiculously profitable in Q2 2018. In fact, Apple took home a mammoth 62% share of the total global handset profit in Q2 2018!

However, despite their dominant market position, Apple does have some chinks in their armour. Their market share of the profits actually went down a bit from the 65% share they enjoyed in Q2 2017.


Nevertheless, Apple’s troubles are nothing compared to their biggest rivals, Samsung. The South Korean smartphone giant has had a torrid quarter, with poor sales of their flagship Galaxy S9 smartphone having a marked negative effect on their bottom line. Samsung’s global handset profit share fell to 17% in Q2 2018, down from 22.3% in Q2 2017. In fact, this is the second consecutive year during which Samsung’s share of the handset industry profits has fallen sharply.

Global handset proft share by brands Q2 2018

Chinese Brands Handset Profit Q2 2018: Xiaomi Surprised Everyone

However, Samsung’s loss is the Chinese smartphone industry’s gain. Each of the big four of the Chinese handset scene – Huawei, OPPO, Vivo and Xiaomi experienced a massive increase in their overall industry profit share. Huawei’s global handset profit share now stands at 8% in Q2 2018, up from nearly 4% in Q2 2017. That’s over 107% YoY increase. Vivo came in second with a 24% YoY increase in their handset profits, now accounting for 4% share in Q2 2018. On the other hand, OPPO registered a nearly 23% YoY increase, accounting for 5% of the total global handset profit share.

However, without a doubt the biggest winner of this quarter was Xiaomi. Xiaomi’s handset profit soared by a whopping 747% in Q2 2018, capturing 3% of the global handset profit share!

The fact that Chinese handset OEMs are becoming more profitable is not really a surprise. In fact, Chinese brands mobile handset profit had crossed $1.5 billion in Q3 2017 – the first time ever. However, this was followed by a less than stellar two quarters, as cumulative Chinese OEM profits fell to $1.3 billion in Q4 2017, and continued their unexceptional performance in Q1 of 2018 when it comes to smartphone shipments. In that sense, Q2 2018 has been somewhat of a mini-renaissance for them.

So why have Chinese OEMs suddenly started becoming so profitable? There are a few factors behind this. The primary factor is the shift in focus to mid-range and premium segments of the market. These segments typically enjoy much more generous profit margins compared to the low end, where margins are razor thin. Nevertheless, the question remains – how are these companies convincing customers to move away from trusty name brands such as Samsung and Apple and embrace the Chinese revolution?


The answer is rather simple – innovation. For years, Chinese OEMs were merely playing catch up with the big boys. Companies like Apple and Samsung would drive innovation with attractive new features, and Chinese OEMs would incorporate them into their own offerings a year or two down the line. However, now Chinese OEMs are leading the line in terms of creativity and innovation with cutting-edge technology such as under screen fingerprint sensors, triple cameras, etc. These highly futuristic features are obviously coveted by a lot of smartphone buyers today, and the data backs up this idea. Another factor driving up profitability is Chinese OEMs’ tremendous success in emerging markets, particularly India. In fact, the Chinese manufacturers’ strategy in India has been so effective that it has decimated the local competition and displaced even Samsung and Apple at the top.

As it stands, it is looking increasingly likely that the future of the smartphone industry may well be dominated by Chinese brands. As a couple of Chinese smartphone OEMs fast approach the $100 billion valuation mark, one has to wonder what the future has in store for a beleaguered Samsung and an under threat Apple.


Please enter your comment!
Please enter your name here

Latest News

₹90 Crore Per Hour: That’s What Mukesh Ambani Added To His Wealth During COVID Era

Today the "IIFL Wealth Hurun India Rich List 2020" was released and guess who kept maintained his...

Can Tata Super App, With the Backing of Walmart, Take On JioMart?

In August, Tata Group, in a move to likely counter the offerings of the Jio umbrella, declared that they are in the...

The Raining Discounts Are Coming As Flipkart And Amazon Gears Up For Festive Season Sale

The festival season is about to begin and eCommerce majors in India Amazon and Flipkart are aiming to make the most of...

Amazon, Google And Microsoft Are Extreme Angry With TRAI

The big three of the tech industry - Amazon, Microsoft And Google - seems to be quite annoyed. Cloud...

New Android Malware Steals Your Banking Credentials And Let Hackers Access Your Smartphone

If you are an active user of banking apps on your Android smartphone, you must pay close attention to it.

An IT Service Help Desk Is Essential To Drive Business Growth

There's no debate about the fact that an IT service desk, when properly run, leads to both short-term and long-term business growth....

In-Depth: Dprime

Will ‘TikTok By Microsoft’ Be A Winner?

For the last two years, TikTok has been in the public eye for all sorts of reasons. First, it was the exploded...

Facebook Subscription Model: Looking Beyond Ad Dollars?

Seldom do job listings create a stir this gripping. However, when the job listing in question is a stealth post from Twitter,...

Will The Online Food Delivery Market in India End Up Becoming A Two-Horse Race?

It's pretty much evident that the food delivery space in India is all set to get riled up soon enough as one...

More Articles Like This