According to a report released on Tuesday by the Federation of Korean Industries (FKI) comparing industry standings of Chinese and South Korean smartphone manufacturers, nine Chinese handset makers have toppled Samsung and LG's combined market share in the second quarter of the year.
The FKI said the nine global Chinese smartphone makers, Huawei, Lenovo, Xiaomi, Coolpad, ZTE, TCL, Vivo, Oppo, and Gionee, recorded 31.3 percent of global market share in the second quarter. Samsung and LG together had 30.1 percent global market share.
Samsung, South Korea's largest smartphone maker, contributed the lion's share of this, at 25.2 percent, shipping more than 74 million handsets.
In the second quarter of 2012, China controlled only 14.6 percent of the market, with just five vendors selling globally. South Korea had 34.8 percent market share then, more than double that of its Chinese neighbours, and Samsung dropped over 6 percent in the same period. Emerging powerhouse Xiaomi had no meaningful market share to be included.
Now, though, Huawei, Lenovo, and Xiaomi -- first, second, and third among Chinese vendors in market share, respectively -- combined for 17.3 percent, 5.4 percent more than the world's second-largest vendor, Apple.
The FKI said that strong interest in Apple's iPhone 6 and price-competitive handsets made by Chinese companies have directly cost South Korea strong shares for the last two years. The federation urged South Korean companies to find new industries to offset losses.
The report also noted the growth of China's automobile industry. China's global share was a meagre 4.7 percent in 2003, but it controlled 12.5 percent as of 2013. South Korea had 5.4 percent in 2003 and 9.8 percent in 2013.
"The Free Trade Agreement between South Korea and China is the best way for South Korea to boost up its core industries, which are now in crisis. Securing new technology and finding new businesses are essential for South Korea to beat China," said Yoo Hwan-ik, assistant secretary general of FKI's Industrial Research division. South Korea and China completed their free trade agreement negotiations last month.