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TheStreet Open House

Samsung's Losing Market Share a Huge Worry

NEW YORK ( TheStreet) - Despite the fact that Samsung shipped twice as many smartphones than chief rival Apple (AAPL - Get Report) in the second quarter of 2013, it lost market share to Asian competitors. That's a huge concern.

According to IDC, Samsung shipped 72.4 million smartphones in the second quarter nearly 50% higher than the 50.3 million devices it moved a year ago. Samsung released the new Galaxy S 4 in the second quarter as well as offering discounted prices for its older Galaxy S III phone.

Despite increased shipments both companies suffered a loss of overall global market share year over year. Samsung's share dropped from 32.2% share last year down to 30.4% in 2Q13. Apple dropped from 16.6% down to 13.1%.

The big winners are LG, Lenovo and ZTE, which are eating into Android sales. These hardware companies all produce Google (GOOG) Android smartphones. LG continues to show impressive strength, with shipments more than doubling year over year from 5.8 to 12.1 million units, while overall market share increased to 5.1%, up from 3.7% previously

Lenovo saw big gains as well, replacing Huawei in fourth place globally. Lenovo reported increasing global market share from 3.1% to 4.7% in 2Q13 with shipments rising from 4.9 million to 11.3 million units. Lenovo has yet to begin marketing its smartphones in the United States. But Lenovo's chairman recently said he sees his company entering the U.S. smartphone market in 2014.

ZTE also had a positive second quarter. Shipments increased from 6.4 million to 10.1 million with market share inching up from 4.1% to 4.2%.

Overall, the worldwide mobile phone market (feature and smartphones) grew 6% year-over-year in the second quarter with total cell phone sales reaching 432.1 million handsets in 2Q13. Of that total smartphone shipments reached 237.9 million units.

Samsung more than doubled Apple's second quarter numbers as well. Apple shipped 31.2 million iPhones during the quarter, alleviating some of the concern investors have had over a slowdown. That's up 20% from last year, when Apple shipped 26 million units in the calendar second quarter.

--Written by Gary Krakow in New York.

>To submit a news tip, send an email to: tips@thestreet.com.

Gary Krakow is TheStreet's senior technology correspondent.

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