The Canalys survey of second-quarter sales released Thursday showed worldwide smartphone sales up 12 percent, with South Korea's Samsung holding its top position with a 19 percent market share.

Xiaomi meanwhile surged to the number two position for the first time ever with a 17 percent share as sales jumped 83 percent, according to Canalys.

Apple dropped to the number three position with iPhone sales up just one percent, after getting a lift from last year's new models.

"Xiaomi is growing its overseas business rapidly," said Canalys research manager Ben Stanton, citing gains of 300 percent in Latin America, 150 percent in Africa and 50 percent in Western Europe.

"And as it grows, it evolves. It is now transforming its business model from challenger to incumbent... It is still largely skewed toward the mass market, however, and compared with Samsung and Apple, its average selling price is around 40 and 75 percent cheaper respectively."

Chinese makers Oppo and Vivo held fourth and fifth place in the global market, each with around 10 percent, according to the Canalys preliminary estimates.

Canalys said the smartphone market is extending gains as the global economy emerges from the coronavirus pandemic, lifting overall consumer spending.

Xiaomi was recently removed from a US blacklist of Chinese firms subject to sanctions over national security concerns.