Samsung Smartphone Sales Plummeted Worldwide Due to Galaxy Note 7

Consumer Product Safety Commission Announces Recall Of Samsung's New Galaxy Note 7
A Samsung's Galaxy Note 7 is held up in a plastic bag with other Note 7 phones returned to a Best Buy in Orem, Utah, Sept. 15, 2016.
George Frey—Getty Images

Samsung’s Galaxy Note 7 battery debacle hurt the company’s worldwide smartphone sales during the all-important holiday shopping season, according to surveys by Counterpoint Research.

From August—just before the Note 7 was recalled due to its potentially exploding battery—through the end of December, Samsung’s global market share in premium phones sales plummeted from 35% to 17%, Counterpoint reported. Apple’s share of the category, which includes phones that cost $400 and up, jumped from 48% to 70%.

For all prices of smartphone sales, Samsung’s share sank from 20% to 15%, and Apple’s share rose from 10% to 19%.

“While Galaxy S7 series sales have been strong, they’ve not been strong enough to fill the void left by the Galaxy Note 7,” Peter Richardson, research director at Counterpoint, wrote in the market share report. “It will be a testing time for Samsung with the upcoming flagship Galaxy S8 to claw back share and then maintain it until the next version of the Note is launched.”

As some analysts had previously predicted, Apple (AAPL) benefitted from Samsung’s woes and got a strong reception for its iPhone 7 line, which has proven more popular than the 6s earlier in 2016, Counterpoint said. Other phones that took share from Samsung in some markets included the Huawei Mate 8, Google (GOOGL) Pixel, and Lenovo’s Moto Z.

“During the first eight months of 2016, Apple saw its smartphone market share remain at a record low compared to the last few years,” Counterpoint research director Jeff Fieldhack wrote. “However, the iPhone 7 series launch has been able to offset most of the previous decline.”

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Apple customers were also likely to pay more than in previous years as they increasingly opted for the larger screen Plus model and models with more storage capacity. That could bode well for Apple’s holiday quarter financial results, which the company will release later on Tuesday.

Chinese phone manufacturer Huawei was a “rising star” during the year as well, Counterpoint said. The company’s global share of smartphone sales hit 10% for the first time in December.

Huawei has said it aims to sell more smartphones than Apple in 2017, a goal that is now within reach, according to Counterpoint senior analyst Tina Lu.

“Performance in North America and key Asian markets will be the key,” she noted. “If it can build on its strong position in Europe, Latin America, Middle East, and Africa, then it has a chance to accomplish this milestone.”

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