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Samsung loses number one spot in India to homegrown Micromax

The Korean giant is struggling to maintain its dominance in growth markets like India, where it slipped to number two, according to market research firm Canalys.

Samsung phones, like this Galaxy Note 4, are not as popular as locally made handsets in India. James Martin/CNET

India-based Micromax just ousted Samsung as the country's top smartphone-maker, according to a February Canalys report, edging Samsung at 22 percent of the smartphone market compared to Samsung's 20 percent.

This a major win for the homegrown vendor, which stands to serve the subcontinent's roughly 1.28 billion population, the second most populous country in the world.

"It was close in Q3 in 2014," said Chris Jones, a US-based Canalys analyst. "Many people would have predicted this, looking at the momentum of the two vendors. It's still very close."

Micromax and other Indian vendors have gained a foothold because their smartphones keep costs low, Canalys analysts suggest, at $200 or under for an unlocked device (equivalent to £130 or $AU260). The local handset-makers are also quicker to integrate support for localized languages -- out of hundreds spoken -- and to support expectations of multiday battery life.

"You get a lot of Samsung phones competing at the same price point in the market," Jones said, including older models. "Indian vendors are targeting Samsung phones and pricing against them."

CNET reached out to Samsung for comment.

Samsung's global struggles continue

Samsung's mobile business has been shaky lately, with profits down in the fourth quarter, the latest in a long downward trend. Cheaper players such as Xiaomi and ZTE in China, and Micromax in India, continue to chip away at Samsung's profits and position as the smartphone king. On the high end, Apple remains a top competitor.

Samsung's chief mobile marketing officer also stepped down earlier this week, according to reports, allegedly on a temporary basis due to health reasons and not performance. It's a crucial time for Samsung's business to get back on track; the company is widely expected to launch its latest flagship model, the Samsung Galaxy S6 , on March 1.

Despite its slipped standing, Samsung is in the best position of any major global brand to profit from India's smartphone sales, which is experiencing explosive growth at a rate of 90 percent per year, according to the Canalys report. Some 21.6 million handsets shipped in the fourth quarter.

"This is not the end of Samsung in India by any means," Jones said. On the other hand, India is "a key strategic market, and it is a blow to lose this leadership. Samsung will be desperate to get that back."

Samsung, now in second place, is followed by two other Indian vendors; Karbonn in third place and Lava in fourth.

Updated 10:06 a.m. PT: Analyst comment added.