There's more trouble for Samsung with the news that it's lost its crown as the top dog in the biggest handset market in the world.

According to Canalys, local OEM Xiaomi - aka 'China's Apple' which sells devices under the Mi brand - has become the #1 smartphone handset manufacturer by volume in China - at least during Q2 2014.

Dialling up local

During that quarter China accounted for 37 percent of global smartphone shipments - 108.5 million units.

Xiaomi took 14 percent share. That's year-on-year growth of 240 percent.

Samsung was in second place, with a year-on-year decline of 15 percent, partly because of the switch in the Chinese market to 4G services.

It and Apple (up 58 percent) were the only international companies in the Chinese top 10.

Together with Xiaomi, Lenovo, Yulong, Huawei, BBK, ZTE, OPPO and K-Touch accounted for 65 percent of market share.

Tomorrow the world?

Perhaps more worrying for Samsung is that Xiaomi is bringing its model of selling relatively high-end Android devices at cost via the web, and then making money on additional services via its MIUI software platform, into southeast Asia and beyond.

Potential markets include Indonesia, Mexico, Russia, Thailand and Turkey.

"Its aggressive pricing model will certainly resonate beyond China, but the challenge it faces in scaling its model for success on a global stage should not be underestimated," said Singapore-based Analyst Jessica Kwee.

"Xiaomi needs to build its international brand, and will need to localize its services offering with MIUI for the different markets into which it expands, else its differentiation, value proposition and service-oriented revenue streams will be eroded."

[source: Canalys]