Monday, July 26, 2021

Dominance in China had driven Huawei to pole position in smartphones

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Dominance in China had driven Huawei to pole position in smartphones

  • Though Huawei’s shipments fell 5% year-on-year due to the pandemic, the figure was better compared to the 30% drop logged by Samsung in the quarter
  • The gain in market share mostly came from the Chinese market, where Huawei shipped 8% more units in this quarter.

Despite facing the US’ ire, Chinese telecom giant Huawei is doing well in its smartphone business, beating Samsung and Apple in global shipments in the June quarter for the first-time ever. Huawei shipped 55.8 million devices in the quarter, ahead of Samsung’s 53.7 million, said a report by Canalys.

Though Huawei’s shipments fell 5% year-on-year due to the pandemic, the figure was better compared to the 30% drop logged by Samsung in the quarter.

Canalys noted that restrictions from the US have “stifled” Huawei’s business outside of mainland China. Despite the lead in the market, Huawei’s overseas shipments fell 27% in the second quarter of the year. The gain in market share mostly came from the Chinese market, where Huawei shipped 8% more units in this quarter. The company now sells over 70% of its smartphones in mainland China, the firm noted.

“This is a remarkable result that few people would have predicted a year ago,” said Ben Stanton, Senior Analyst at Canalys. He said that “it wouldn’t have happened” if it wasn’t for the pandemic. “Huawei has taken advantage of the Chinese economic recovery to reignite its smartphone business,” he added.

Canalys analyst Mo Jia noted that Huawei will find it hard to maintain its lead in the long term. The company’s major channel partners in key regions like Europe, are wary of selling its products and are “taking on fewer models” to reduce risk, he noted.

Lead in China alone won’t work for Huawei in the long term, especially because the company has also failed to gain a foothold in India. Over 90% of the world’s second largest smartphone market is controlled by Xiaomi, Samsung, Vivo, Oppo and Realme. Huawei and its Honor brand battle for about 8% of the market, against many other brands, according to recent reports from Counterpoint Research and Canalys.

According to a study published by Cybermedia Research (CMR) today, total smartphone shipments dropped by 41% in the quarter ended June, against the previous quarter.

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