According to a report by Canalys on 15 July, Xiaomi became the second-largest smartphone brand for the first time ever in Q2 2021 with a 17% market share, while Apple dropped to third place with a 14% market share. Xiaomi also had the largest annual growth out of the top 5 largest smartphone brands, with an annual growth rate of 83%. However, Samsung remains in first place with a 19% market share. Overall, global smartphone shipments increased by 12% as most parts of the world are recovering from the pandemic.
Although Apple has lost to Xiaomi in terms of market share, it is unlikely that Apple will be worried by this. Xiaomi's portfolio consists of a large percentage of budget phones aimed at the mass market, so its average selling price is about 40% lower than Samsung's and a whopping 75% lower than Apple's. Thus, Xiaomi plans to put more money into producing flagship phones such as the Mi 11 Ultra that can compete with other top phones like the iPhone 12 Pro Max and Galaxy S21 Ultra.
However, Xiaomi isn't the only Chinese smartphone manufacturer looking to make progress in this area. It is also competing with companies like Oppo and Vivo, which are in 4th and 5th place by market share respectively. Both of these manufacturers are similar to Xiaomi as they offer a wide selection of budget phones, but also plan on making more flagships. Oppo and Vivo are both owned by the same parent company, BBK Electronics, so their collaboration could pose a substantial challenge to Xiaomi.
Although Apple has been overtaken by Xiaomi in market share and potentially by Oppo and Vivo in the future, its annual revenue is likely to remain higher than all three of these competitors. This is because its portfolio consists entirely of flagship phones that are some of the most expensive in the entire smartphone market, and it is still growing in terms of number of shipments, albeit slowly.
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