The smartphone market has become increasingly crowded since Apple (NASDAQ:AAPL) launched the seminal iPhone in 2007. Five vendors now dominate the space, according to Gartner's first-quarter 2017 numbers: Samsung, Apple, Huawei, Oppo, and Vivo.
Samsung and Apple saw year-over-year market share declines during the first quarter as Huawei, Oppo, and Vivo all grew. The three Chinese companies are pivoting toward the premium market to challenge Apple and Samsung, marking a shift from the low-end strategy employed by other Chinese vendors.
Apple typically releases two new flagship phones annually in order to maintain its position, while its rivals launch dozens of different devices. The tech titan also commands significantly higher gross margin than every other smartphone maker, capturing about 79% of the world's smartphone profits in 2016, according to research firm Strategy Analytics.
Apple's ability to charge premium prices is a meaningful advantage. Other smartphone makers must sell a lot more smartphones than Apple to generate the same amount of profits, giving the iPhone maker the upper hand.
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