Stiff competition: Huawei passes Microsoft as third-largest mobile phone maker

Research firm Strategy Analytics late Wednesday reported Apple (AAPL) and China’s privately held Huawei gained share of the global mobile phone market in Q2, while both Samsung Electronics (005930KS) and Microsoft (MSFT) saw their respective share decline. But now it’s time to sit up and take notice – it’s just overtaken Microsoft as the world’s third-largest phone maker.

In addition, LG posted 14.1 million shipments, representing a y-o-y decline of just under 3 percent while Microsoft continues to steadily increase shipments in the lead up to Windows 10 for phones, shipping 8.4 million devices, a 12 percent increase over past year.

As analyst Linda Sui with the firm puts it, “Smartphone growth is slowing due to increasing penetration maturity in major markets of the US, Europe and China”.

Smartphones accounted for 78% of mobile phone shipments worldwide in Q2, according to Strategy Analytics.

Microsoft shipped 27.8 million mobile phones and captured 6 percent market share. But Samsung registered significant loss: market share dropped from 22.3 percent (second quarter, 2014) to 20.5 percent (second quarter, 2015).

It figured out how to develop its handset deals by 45 percent year over year and achieve 7 points market share of the industry. The second quarter has proven to be quite beneficial for Microsoft’s competitor as it saw a 7 percent market share rise during this period. Its smartphone shipments fell 3% year over year to 71.9 million units. Nevertheless, Samsung’s products are said to be relatively basic, whereas Apple’s numbers started rising in contrast.

Another reason that can be attributed to Huawei’s number three spot is the fact that Microsoft has not been able to dominate the smartphone market since it acquired Nokia.

“Samsung faced intense competition from Chinese brands in the low-end smartphone market, while the company underestimated demand for its popular S6 edge flagship model in the high-end”, explained Strategy Analytics executive director Neil Mawston. As per statistical surveying by Strategy Analytics, Huawei was the star of the last quarter. But that’s a substantial decrease from the 26% growth rate of the year before that, as quarterly shipments reached a total of 290 million.