​Samsung's biggest headache isn't Apple, it's China

The tech industry loves the Samsung vs. Apple storyline. It's more like the Samsung vs. Apple and a bunch of smaller but dangerous Chinese smartphone makers.
Written by Larry Dignan, Contributing Editor on

Samsung Electronics and its smartphones are usually pitted against Apple's iPhone juggernaut, but the company has a much larger issue down market as it battles in a cutthroat Android market.

In Samsung's fourth quarter earnings report, the company said it shipped 95 million phones and 11 million tablets. About 70 percent of those phones were smartphones.

The common theme in the tech industry is to pit Apple and Samsung against each other. It's the iPhone 6 and 6 Plus against Samsung's Galaxy line of smartphones. The iPad battles Samsung's various tablets.

That storyline is simple and easy to understand---in fact it's not much different than a generic sports story.

Unfortunately, Samsung's smartphone tale just isn't that simple. Apple and Samsung both play ball in China, but the former has remained at the high end. Apple is denting Samsung on the high end of the market, but the low end is what's killing the Korean electronics giant.

Analysts say that Samsung lost ground faster in China last quarter due to a bevy of local phone makers. Welcome to Android and the race to the bottom for hardware makers.

Data from Strategy Analytics tells the tale:


Samsung and Apple are clearly duking it out at the top of the market. Samsung, however, has to worry about a bulked up Lenovo and Huawei. There's also companies like Xiaomi to worry about.

As Strategy Analytics noted:

Samsung continues to face intense competition from Apple at the higher-end of the smartphone market, from Huawei in the middle-tiers, and from Xiaomi and others at the entry-level. Samsung may soon have to consider taking over rivals, such as Blackberry, in order to revitalize growth this year.

Simply put, Apple has to worry about Samsung only on the high end. Apple doesn't play in the basement of the smartphone industry. Samsung does. And that basement is getting messy.


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