Apple is moving away, Chinese phones are behind… The dilemma of ‘Sandwich Galaxy’

The ‘sandwich’ crisis of Galaxy smartphones is deepening. In markets such as India and Southeast Asia, where mid- to low-priced phones are the main focus, it fell behind China, and sales of premium phones fell short of expectations. Even AI (artificial intelligence) smartphones that have won the ‘first’ modifier must remain in second place for the time being. The success of new products such as the Galaxy S 25, which will be released early next year, is desperately needed.

According to the ‘Generative AI Smartphone Shipment Forecast Report’ released by market research firm Counterpoint Research on the 12th, Apple is expected to take first place in AI mobile phone shipments by brand this year.

Counterpoint Research observed, “Apple will secure over 50% of the generative AI smartphone market by applying the AI ​​function ‘Apple Intelligence’ to all iPhone 15 Pro models and iPhone 16 series models.” On the other hand, regarding Samsung, it said, “Galaxy AI functions are supported only on major flagship models, so it ranks second with less than 20% market share.”

This is due to the difference in lineup between Samsung Electronics, which produces a wide range of models from flagships to mid- to low-priced models, and Apple, which only produces flagship models. Samsung also decided to apply the Galaxy AI feature to previous models, such as the Galaxy S21 series released three years ago, in addition to the flagships introduced this year, such as the Galaxy S24 series and Z6 series. However, if you narrow the scope to only flagship models, Apple’s shipments are still superior.

In fact, the top selling smartphone model in the third quarter was the iPhone 15 Basic, second was the iPhone 15 Pro Max, and third was the iPhone 15 Pro. Additionally, the iPhone 14 Basic also ranked 8th, and four models in the top 10 were Apple products. 4th to 7th place were the Galaxy A 14 4G, Galaxy A 14 5G, Galaxy A35 5G, and Galaxy A05, but all are entry-level models and do not support AI.

━

‘Focus on S·Z’ Samsung phones… The midterm report card is

━

ASP trends by smartphone brand. /Photo=Counterpoint Research

Samsung Electronics (53,600 won ▼1,400 -2.55%) has recently simplified the entry-level A·M lineup and is focusing on the premium model S·Z series. It is an ‘upselling’ strategy that competes with Apple for premium phones using AI and foldables. In emerging markets, this is to break away from the sandwich situation where the company is being pushed out by the volume of low-priced phones from China and its average selling price (ASP) is far behind that of Apple.

There have been no visible results to date. According to Counterpoint Research, the ASP of Samsung Electronics smartphones in the third quarter was $295, the same as a year ago. In the industry, Samsung’s ambitious third quarter product, the Galaxy Z6 series, is analyzed as a result of lower-than-expected box office success. On the other hand, during the same period, the ASP of Apple smartphones rose from $899 to $909, widening the gap between first and second places.

The pursuit of Chinese low-priced phones is fierce. According to a Canalys report, China’s Oppo ranked first in the Southeast Asian smartphone market in the third quarter with shipments of 5.1 million units and a market share of 21%. Compared to the third quarter of last year, market share increased by 3 percentage points. On the other hand, Samsung shipped 4.1 million units and recorded a 16% market share, down 3 percentage points from the same period last year. This is the first time that Samsung has missed the top spot in quarterly shipments in Southeast Asia.

China is also making rapid progress in India, a ‘populous country’. According to a Counterpoint Research survey, Vivo ranked first in terms of shipment volume in the Indian smartphone market in the third quarter, with 19.4%, and Xiaomi ranked second with 16.7%. Samsung, which ranked first in shipments in the third quarter of last year (17.2%), ranked third this year with 15.8%.

━

Galaxy S25, thinner and cheaper Galaxy Z… ‘Premium’ strategy continues

━

There is no change in Samsung’s ‘premiumization’ strategy. It is judged that the growth strategy that emphasizes ‘quality over quantity’ is still effective. In the Indian market, the desired results were also achieved. Samsung maintained its No. 1 position in India in the third quarter of this year with a 22.8% smartphone sales share. It surpassed even second-place Apple (21.6%) and widened the gap with Chinese manufacturers Vivo (15.5%), Oppo (10.8%), and Xiaomi (8.7%).

In addition, we are focusing on increasing ASP by diversifying our premium phone lineup, including the Galaxy S25, which will be released early next year, the recently introduced ‘thinnest ever’ Galaxy Z Fold SE, and a new foldable phone that lowers the price threshold. Daniel Araujo, managing director of Samsung Electronics’ MX (User Experience) Division, emphasized in a conference call on the 31st of last month, “We plan to drive sales growth centered on flagship phones based on the advancement of Galaxy AI.”

Samsung’s progress is also expected in the AI ​​phone market. This is because Galaxy AI features that have received favorable reviews from users will be expanded to Samsung’s mid- to low-priced smartphone lineup starting next year. Counterpoint Research said, “Thanks to strong word-of-mouth from consumers and Samsung’s aggressive marketing campaign, Samsung will be able to further expand its presence in the generative AI smartphone market over the next few years and significantly narrow the gap with Apple by 2028.” I predicted this.