'Xiaomi may top Q2 smartphone charts here, but rivals closing in'

MR_Wu
2022-06-08

Amid government scrutiny and organisational changes,Xiaomi Indiais expected to retain its leadership position in the local smartphone market the June quarter, according to market trackers. 

However, the September quarter may pack some surprises for the Chinese-owned company asSamsungmakes strong inroads, and withRealmehot on the heels, said some of them. Xiaomi, which is battling charges of illegal foreign remittances levelled by the government, closed the March quarter with a 23% market share, even though its shipments declined 13% from a year earlier, according to Counterpoint Research data. Samsung maintained the second position with a 20% share, with a 1% decline in shipments. Realme made significant inroads with a 16% share in the market, up from 11% in Q1 of 2021. In fact, in March, Samsung had a 22% market share by shipments against Xiaomi's 21% and Realme’s 17%, according to Counterpoint Research. The Korean phone maker leveraged its vertical supply chain at a time when the industry faced shortages and supply constraints due to Covid-19 lockdowns in China.

"If you split up Xiaomi,Redmiand Poco as separate brands, Samsung could already be leading the market with a 5-6% higher share of the market, but with all three combined,Xiaomiis going to be ahead of Samsung in the June quarter," said Faisal Kawoosa, founder and chief analyst of TechArc that tracks sales volume instead of shipments.

Counterpoint Research also expects no change to the current top position of Xiaomi in the June quarter. But competition will be neck to neck, owing to low consumer demand as an impact of record retail inflation.

The market leader registered a 24% on-year increase in average selling price, indicating a move away from the mass-market segment to more premium pastures, where Samsung said it held a 38% share in March 2022. "The exceptional growth in the month of March points to a stronger double-digit growth for Samsung in the current April to June 2022 quarter," Raju Pullan, senior vice president of MX Business at Samsung India said in a statement in May.

Samsung led the market in 5G smartphone shipments with a 23% market share in the first quarter of 2022, with Xiaomi at the second spot with a 18% share, according to Cybermedia Intelligence data.There was not too much volatility in April, but the impact of inflation could have been felt in May, said Prachir Singh, senior analyst at Counterpoint. However, with online channels beginning their deep-discounting sales from July, he expects the demand to bounce back, provided the economy improves in the coming months."With the Karnataka High Court having imposed a stay on the Enforcement Directorate order freezing Xiaomi assets worth over Rs 5,500 crore, and allowing the company to continue with its day-to-day business and import of items, the company's market position will not be impacted too much," Singh said.Xiaomi has been under investigation by the ED over royalty payments to Qualcomm and its own parent group.

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