Next year, the expectation is growing that Samsung Electronics' smartphone shipment will find it increasingly difficult to maintain its position as the world's number one. This is because of the outlook that the Trump administration's second term will exempt tariffs on iPhones produced in China when imported into the United States.
While Apple can secure price competitiveness and increase sales in the U.S. market, Samsung Electronics is expected to face an inevitable decline in price competitiveness due to the tariff burden. With Samsung Electronics and Apple engaged in fierce competition, characterized by a slight market share difference, there are also forecasts that the tariff policy of the Trump administration's second term may change the fate of the two corporations.
According to the industry on the 20th, Deepwater Asset Management, a U.S. investment firm, stated in a report this month that 'Apple and Tesla will be exempt from the tariffs on imports from China due to Trump' and emphasized, 'President-elect Donald Trump does not want Tesla to lose to BYD or Apple to lose to Samsung.'
President-elect Trump hinted that he would impose a minimum high tariff of 60% on all products made in China during his candidacy. Currently, it is known that Apple produces about 80-90% of its total iPhone volume at its Foxconn factory in China. If the exemption of tariffs on iPhones produced in China becomes a reality, Apple is expected to avoid considerable burdens. In 2019, during the Trump administration's first term, a 10% tariff was anticipated on products manufactured in China; however, Apple CEO Tim Cook persuaded the U.S. administration to exempt them, citing increased competition.
On the other hand, Samsung Electronics is expected to face an unavoidable tariff burden in the U.S., which is a premium smartphone market. This is because President-elect Trump announced that he would impose a universal tariff of 10% on all imported goods from overseas countries as part of his campaign promises. Currently, the average tariff rate in the United States is around 3.3%, and smartphones are duty-free regardless of the country of production. Samsung Electronics reportedly produces about 60% of its total smartphone volume at factories in Vietnam, which does not have a free trade agreement (FTA) with the U.S., leading to limited tariff benefits in trade. Additionally, as Vietnam has been identified as a bypass base for China's exports to the U.S. after the U.S.-China conflict, there are forecasts that the tariff levels could be strengthened.
Samsung Electronics recorded a 23% market share in the U.S. smartphone market in the third quarter of this year (according to Counterpoint Research), securing the second position behind Apple. This represents a 2% point decrease compared to the previous year. Apple maintains the lead with a market share of 53%, the same as last year.
Market research firm Canalys reported that Samsung Electronics' global smartphone market share stood at 19% in the third quarter of this year. The difference with second-place Apple (18%) is only 1% point. Furthermore, although Samsung Electronics' market share in the U.S. smartphone market has declined by 1% point compared to the same period last year, Apple has increased by 1% point.
Park Kang-ho, a researcher at Daishin Securities, remarked, 'Since Samsung Electronics and Apple are competing with a small difference in market share in the global smartphone market, the tariff policy of the Trump administration's second term could bring about significant changes.'