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With exports of semiconductors, displays and electronic equipment falling sharply recently, there are growing concerns that the Korean electronics industry is losing its competitiveness in the market.
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| A Korean electronics manufacturing company |
According to the Korean website Business Korea, there are growing concerns that smartphones, one of South Korea's main exports, are losing competitiveness to Apple's iPhone and low-cost smartphones from China. Of course, Samsung Electronics still leads the market in terms of units sold, with the world's largest market share (22%), equivalent to 259.6 million smartphones in 2022. But when compared to Apple's iPhone 13 smartphone alone, which sold 224.7 million units in the same period, the Korean smartphone giant is losing ground.
According to market research firm Counterpoint Research, the world's best-selling smartphone model in 2022 was the iPhone 13, accounting for about 5% of total sales, and Samsung's Galaxy A13 was only fourth with 1.6% of total global smartphone sales; while the Galaxy A03 was in 10th place. This shows that Samsung's Galaxy series is losing its strength as a premium smartphone brand and is being pushed into the low-cost smartphone market.
However, in the low-cost segment, Samsung faces “heavyweight” competitors from China. For example, Chinese smartphone maker Honor has started taking pre-orders for its Magic V2 foldable phone in China since July 12. The Magic V2 weighs 231 grams and is only 9.9mm thick when folded and 4.7mm thick when unfolded, priced at 8,999 yuan ($1,264), cheaper than the Samsung Galaxy Z Fold 4 with the same functions, which costs about 2 million won ($1,560).
Korean companies have also lost ground to Chinese companies in the vacuum cleaner and drone markets. Samsung Electronics and LG Electronics are selling robot vacuum cleaners by focusing on their Bespoke and Object collections, but their respective global market shares are small. While Roborock is No. 1 in the Korean robot vacuum cleaner market and Ecovacs is No. 1 in the global market – both Chinese companies. Korean companies are also seeing an uphill battle in the cordless vacuum cleaner market. According to market research firm ReportLinker, the global cordless vacuum cleaner market is expected to grow from $6.73 billion in 2022 to $9.43 billion in 2026.
The rapidly growing global drone market in recent years is also dominated by Chinese products, expected to increase from $17.6 billion in 2019 to $42.8 billion in 2025. As of 2021, China's DJI dominated the global civilian drone market with a 76.0% market share, far surpassing the second-placed US Intel (4.1%). South Korean drone makers have an average revenue of just 2 billion won ($1.56 million).
According to the Ministry of Trade, Industry and Energy of South Korea, the global geopolitical situation has left countries struggling with higher prices and slower growth. This is hurting economies that rely on industrial exports in general, but the impact on South Korea is greater than others. If semiconductor exports recover, South Korea's electronics exports will be less difficult, the ministry said.
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