Samsung, Xiaomi or Micromax: The smartphone leader depends on the market report you read


The past few weeks have seen the revelation of shipment figures and revenues for the quarter just ended, and along with it numerous reports, indicating that the smartphone market is in the throes of change in India and China, two major markets for mobile manufacturers.

 

But the challenge for casual analysts and industry watchers is to sift through this torrent of reports and market trackers to see if there’s a common pattern to be followed. However the numbers vary from one research firm to another, and revelations from former analysts point out that even those released by companies may be wildly inaccurate. So which one is the truest count?

 

Samsung, which led the China smartphone market for many years, has now been dethroned by Xiaomi, according to Canalys. “Despite challenges in China, Samsung retained its global lead with a 26% share, though it was its lowest global share in two and a half years – down from 32% in Q2 2013 and 31% in Q1 2014,” the research firm said.

 

In India, Counterpoint Research says Samsung is still the leader in the smartphone game, but Micromax is the overall kingpin in the mobile market, and is snapping at the Korean company’s heels. However, Samsung itself has scoffed at these findings and said that there’s no threat at the moment. “Leave aside downtrend; we saw growth in the second quarter value-wise and volume-wise. Based on actual off-takes done through syndicated research, we continue to lead the market by a significant margin. The No. 2 brand is a fourth of our size,” Samsung India's vice-president for marketing (mobile and IT) Asim Warsi told Economic Times last week.

 

In worldwide figures too, Samsung let slip its lead, according to IDC. According to this data, Samsung has 25.2 percent of the market at the end of Q2 2014. Note how this figure is lower than Canalys’s report.

 

More discrepancies pop up when you look at who follows Samsung in these reports. IDC says Apple, Huawei, Lenovo and LG make up the top five, with the US company netting a market share of 11.9 percent. Canalys has Apple on second place with 12 percent, Huawei and Lenovo in third and fourth, but Xiaomi on fifth. One can see a pattern here with Xiaomi on Canalys’s report.

 

Back in 2010 too a similar discrepancy was noted in the numbers reported by IDC and Gartner. As this post on Asymco says,  for the 2010 market, the two firms had a discrepancy of 77 million mobile devices in their total phone estimates. That’s a huge number by any standard.

 

It’s not just with smartphones or mobiles that research firms have been dropping the ball. A look at the PC market also reveals a big discrepancy in the way IDC and Gartner, two of the biggest in the business, reported Q2 numbers for PC vendors. Apple Insider  says both reports had Apple losing market share to different degrees, but Apple’s own earnings call to investors showed that Macs were one of the positives for the company in this period.

 

In an interview with Fortune magazine a former IDC researcher says, “The mantra became, preserve the growth rates; to hell with the actual numbers. Even the growth rates are fiction. The fudge is in the “others” category, which is used as a plug to make the numbers work out. In fairness, we did do survey work, calling around, and attending white box conferences and venues to try to get a feel for that market, but in the end, the process was political. I used to tell customers which parts of the data they could trust, essentially the major vendors by form factor and region. The rest was garbage.”

 

The report goes on to say that most companies are aware of this fudging of numbers, but did not raise any issues since it was convenient. Executives at major vendors would get bonuses tied to official numbers from IDC, according to the interview.

 

The obvious takeaway is that market reports are not all that they’re made out to be. They could be an indication, but even then they cannot be assumed to be bona fide. So let’s not be quick to coronate a new king or proclaim a ‘Nokian’ death based on these.


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