Apple and Samsung both announced a decrease of market share yesterday, what are the consequences of this loss of market share for themselves, competitors?

Apple and Samsung both announced a decrease of market share yesterday, what are the consequences of this loss of market share for themselves, competitors?

The loss of market share for Apple and Samsung can indicated that there are lots of substitutes going into the market. Consumers are able to accept the substitutes due to lower costs and better quality than Apple & Samsung. The increasing of Chinese products brings the threats to both brands. For instance, Huawei for the same period kept a market share of 4.7 percent and Lenovo had an increase from 3.9 to 4.7 percent. As such, Apple introduced a lower cost Smartphone, iPhone 5C that tries to dominate back the market share. However, the price and spec doesn’t really appeal to the consumers and they would rather go for other substitutes.

The consequences of loss of market share can bring bigger competition among the existing and as well as new competitors. With the technology that is improving every day, it can reduce the barrier of entries of producing low cost and better quality smartphones. Some of upcoming Smartphone makers like Xiaomi and from report it indicated that revenue was up by 150 percent from the same quarter a year ago.

Another consequence will be retrenchment may occur in both brands if the market share continuing to decrease significantly.  Apple & Samsung will have lesser profit, thus, to reduce the high cost they may take consideration of retrenchment and result it may also affect their research & development as there will be lesser budget and talents for it. When lesser budgets are given to research & development, it may affect the quality of smartphone making them losing more market share.

In order for them to stay as leaders in the market share, Apple may look into producing a lower cost & good quality phone that pricing can fight against Huawei & Xiaomi Smartphones and having bigger screen size. In this way, Apple may able to capture new customers or retain existing customers.  Samsung may look into apps that are more unique to just Samsung users and not as Android user, since, they are quite a number of Smartphones maker are using Android as their operating system.