China's Huawei overtakes Microsoft as world's No. 3 mobile phone vendor

Microsoft has lost its spot as the world's third-largest mobile phone vendor to a rival from China, according to a new report by market researcher Strategy Analytics.

During the second quarter, Microsoft's share of the global mobile phone market sunk to 6.4 percent from 11.9 percent for the same quarter last year. In terms of mobile phone shipments, Microsoft's plummeted to 27.8 million from 50.3 million a year earlier, Strategy Analytics said Wednesday.

On the flip side, Chinese mobile phone vendor Huawei saw its market share rise to 7 percent last quarter from 4.8 percent in 2014's second quarter. Shipments of Huawei's mobile phones jumped to 30.6 million from 20.6 million over the same period, according to Strategy Analytics.

Prior to last quarter, Microsoft was hanging onto the No. 3 spot, though far behind Apple and Samsung. The latest results pushed Huawei past Microsoft for the first time.

Microsoft has been feeling pain in the mobile phone market. The software giant, which paid more than $7.2 billion to acquire Nokia's smartphone business last year, has failed to make any dent among consumers since then. With lackluster demand for its Lumia phones, Microsoft continues to lose share to the competition. Its 6.4 percent slice of the global mobile phone market is near an all-time low. Microsoft will roll out Windows 10 to its mobile phones sometime later this year, hoping the new OS may revive sales. But at this point the competition is continually getting stronger.

"Huawei is rising fast in all regions of the world, particularly China where its 4G models, such as theMate7, are proving wildly popular," Strategy Analytics director Ken Hyers said in a statement.

Fellow Chinese vendor Xiaomi saw its second-quarter market share rise to 4.6 percent from 3.5 percent in the same quarter a year ago, as shipments rose to 19.8 million from 15.1 million. Xiaomi continues to be a major player in the Chinese mobile phone arena, though it's facing stronger competition from Huawei and other vendors both locally and abroad.

And what about the top two players?

Samsung held onto its lead, though its global mobile phone market share dropped to 20.5 percent in the quarter from 22.3 percent a year ago -- with shipments slipping to 89 million from 95.3 million -- as the company struggles with weak demand for its latest smartphones. On Wednesday, Samsung reported its seventh straight drop in quarterly earnings and announced that it would cut the price of its three-month-old Galaxy S6 to try to lure in more buyers.

In second place, Apple watched its market share last quarter rise to 10.9 percent from 8.2 percent in the year-ago quarter. Mobile phone shipments increased to 47.5 million from 35.2 million over the same time thanks to demand for the big-screened iPhone 6 and iPhone 6 Plus in China and other countries.

But overall, mobile phone shipments failed to grow much last quarter.

"Global mobile phone shipments grew a lackluster 2 percent annually from 428 million units in [2014's second quarter] to 434.6 million in [2015's second quarter]," Strategy Analytics director Woody Oh said. "Smartphones accounted for 8 in 10 of total mobile phone shipments during the quarter. The 2 percent growth rate of the overall mobile phone market is the industry's weakest performance for two years, due to slowing demand for handsets in China, Europe and the US."