Apple and Sumsung decrease in market share

Samsung’s share of the market has receded slightly, going from 32.2 percent last year to 30.4 percent in Q2 2013 while Apple sees 13.1 percent share of the market, which is down on 16.6 percent in Q2 2012. In contrast, LG, Lenovo and ZTE saw greater year-on-year growth and quarterly growth than Apple or Samsung.

The consequences for Apple and Samsung can be far reaching as mobile devises account for major part of their businesses. iPhone and iPad account for two thirds of Apple's overall sales. A decline in market share will have substantial negative impact on its bottom line. Possible reasons attributing to the decline in the market share are products innovation, marketing strategies and responsiveness to consumers' ever-changing demands.

Innovation has been the competitive advantage for both companies The companies attracted new customers mainly because of attractive features and apps, and locking them in with must-have services and companion gadgets. Of late, this leadership position has been challenged. Apple is simply not catching up on innovation. The company hasn't launched a new smartphone or tablet in about a year before coming up with the iPhone 5S and 5C, while competitors are releasing new devices far more frequently.  If this advantage is eroded, then it has grave consequence to the company.
 
Both companies need to do more in developing markets such as China, where affordability is a major factor. Samsung’s smartphone market share in emerging market such as China is dwindling.  Xiaomi dethroned Samsung in December 2013 as the most popular smartphone brand in China, simply because it is more affordable to the locals. Although Apple launched the lower-cost iPhone 5C last year, the price of the product is still considered high to many.  To compete on price, Apple and Samsung may have to produce devices in the local market, taking advantage of lower cost resources.  If not, they face the consequences of losing more market share to local competitors.

Do Apple and Samsung know their customers well enough to enable them to response quickly to their changing needs?  In the digital age, both companies can certainly do more to profile and engage consumers through the various online platforms. Considering their cross-boundary businesses, this is crucial to come up with the right marketing mix for each of the markets.