Samsung Loses Top Spot in China and India, as Locals Ascend

Samsung Electronics Co., the global leader in mobile-phone sales, is being outflanked in the key markets of China and India by newcomers catering to domestic tastes.

Xiaomi Corp. became the largest smartphone vendor in China during the second quarter, while Micromax Informatics Ltd. topped Indian mobile-phone shipments, according to data from research firms this week. In both cases, Samsung fell to No. 2.

Earnings and shipments at Samsung are shrinking as consumers increasingly look past its Galaxy devices to local makers selling inexpensive phones. Xiaomi keeps prices down by selling through its website and tapping social media to create Apple Inc.-like buzz, while Micromax offers models with longer battery life and dual-SIM capacity in a market where wireless carriers don’t subsidize phones.

“Xiaomi and other smaller players in India are catching up very fast,” Cho Woo Hyung, a Seoul-based analyst at Daewoo Securities Co., said by phone today. “If you lose market share, it’s hard to get it back, so Samsung will continue to churn out as many handsets as possible to retain its dominant share in the smartphone market.”

Xiaomi became No. 1 in China by shipping 15 million devices in the second quarter, giving it a 14 percent share of the market, researcher Canalys said in a statement on its website. Samsung shipped 13.2 million smartphones, giving the Suwon, South Korea-based company 12 percent of the market.