Xiaomi maintains its lead over Samsung in China's smartphone market

The fast-rising Xiaomi has extended its hold over China’s smartphone market, and continues to lead as the country’s biggest vendor, with Samsung Electronics lagging in second place for the second quarter in a row.

During the third quarter, Xiaomi shipped about 17 million smartphones to the Chinese market, about 2 million more than its Korean rival, according to new data from research firm Canalys.

It’s a big shift for Beijing-based Xiaomi, which only began selling phones three years ago, but has quickly become one of China’s hottest tech companies. Globally, Xiaomi became the world’s third-largest smartphone vendor, almost solely on product sales in China, according to Canalys.

Samsung, on the other hand, had once consistently led as China’s largest smartphone vendor, by selling a wide range of devices to consumers across the country. But in the second quarter, it fell to second place behind Xiaomi as a result of growing pressure from lower-priced handsets coming from Chinese rivals.

Xiaomi, for example, sells its own cutting-edge flagship phone with a starting price of 1999 yuan, less than half what Samsung’s Galaxy S5 sells for in China.

The Chinese market is especially important for vendors, given that the country accounted for 34 percent of global smartphone shipments in the third quarter. To fight back, Samsung last week announced two new mid-market phones for China.

Still, it won’t be easy for the Korean electronics giant to regain its lead in China. In the third quarter, Lenovo was ranked third in the country’s smartphone market, just behind Samsung.

Lenovo has just completed its acquisition of Motorola, and intends to revive the brand in China to sell smartphones.

Last month, Lenovo also said it would start up a new mobile devices company specifically for China that’ll likely compete more directly with Xiaomi.