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April 2, 2014

Why Lenovo and Huawei could outperform Samsung and Apple in the West

The Chinese firms are at the beginning of their global expansion, analyst firm says.

By Amy-Jo Crowley

High-end smartphones like Apple’s iPhone and Samsung’s Galaxy S5 are set to struggle to compete against cheaper smartphones worth $300 or less from Lenovo and Huawei for the first time, an analyst firm has suggested.

According to Gartner, Samsung currently holds 37.2% and 26.9% of the smartphone market in Europe and North America, while Apple’s share in Europe is 25.2% and 42.3% in America.

However, Annette Zimmerman, a research director of consumer markets and technology, told CBR this will change as leading Chinese players target mature markets with smartphones that have similar features and functionality as more expensive devices from Samsung and Apple.

"Huawei and Lenovo are definitely going to expand," she explained. "They’ve already expanded quite well in Russia, the Middle East and Africa and they’re looking into the Western European market as well.

"More than 90% of Lenovo’s sales have been in China and not international, so they’re only at the beginning of stepping out of China and trying to become a more international player.

"It acquired Motorola, which will definitely play a role in their expansion strategy looking at not only Western Europe but also in regions like North America and Latin America."

She also pointed to ZTE, which has already shown growth in Western Europe.

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She added: "Huawei introduced its new flagship product, which had nearly the same spec as one of Samsung’s high-end phones, but it was almost $200 cheaper. So, in that sense, they’re really trying to undercut the key brands here like Samsung."

When asked what Samsung could do to keep its share of the market, she said: "It should definitely focus on bringing more of the interesting technology or the innovation range to mid-range rather than focusing on the high-end ones.

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