In the last few years, we have seen a rise of Chinese manufacturers. While China remained as the largest smartphone market in the world, the slowed down penetration rate made the Chinese brands to look out for global expansion. The rise of Chinese brands has seen the decline of well established Android brands like Samsung, LG, Sony, and HTC. The margin of profits made the Chinese brands is much lower than the Global brands and with the smartphones sporting almost same specifications, there is a huge price difference between a Xiaomi and Samsung product.
Even though Samsung has sold more number of handsets than Apple, we can clearly notice that Apple is having a more profits than Samsung. While the Average Selling Price (ASP) of each Samsung handset is just $225 in Q4 2015, in the same time Apple has an ASP of whooping $691. Apart Samsung and Apple, no other global brands have seen much popularity in 2015.
The reason for Sony’s highest ASP is because of it focus on the premium category. Each Sony device is costing $422 on average and is also making a higher profit than any other Android powered smartphone manufacturer. Sony has a $26 profit on each device sold in Q4 2015 while Samsung has $23 and the rest of the Android manufacturers are selling their devices at a loss.
For every HTC device sold in the Q4 2015, the company has lost $38, and LG has lost a mere $3 on every device sold. Analysing these numbers, we can decide that Sony has been making more profit. But even though the company is making higher profit on each device sold in the market, the number of Sony devices sold in Q4 2015 are just 7.6 million while Samsung and LG sold 81.5 million and 15.3 million devices respectively.
Even the Microsoft has lost $36.11 on every device they sold in Q4 2015 which is slightly lesser than HTC’s $37.65 loss. While Sony has unveiled a new X-series devices at MWC 2016 which will also be placed in the premium category. On the other hand, HTC has confirmed its flagship HTC 10 to launch on April 12th. We expect them to have some good days in 2016.
The Samsung Galaxy S7 & Galaxy S7 Edge are said to be the best smartphone available in the market. Even both these devices attracted more than 10 million pre-orders in China. On the other hand, Apple has unveiled its smaller 4-inch iPhone SE priced at $399 in the U.S and Rs. 39,000 in India. According to the early estimates, iPhone SE could reach 15 million sales by the end of 2016. By competing with Samsung, Apple, and the Chinese counterparts, we don’t think Sony and HTC will have an easy task to increase their market share.