Amidst a smartphone sales slump, Huawei sales are booming, despite ongoing political tensions with the US.
Huawei’s share in the global smartphone market reached its highest ever level of 17% during the first quarter of 2019, according to the latest research from Counterpoint’s Market Monitor service.
Huawei is locked in ongoing tensions with the US over its alleged links to the Chinese government and accusations that it has stolen information from US companies, meaning the phones are not officially sold in the US and federal agencies are banned from using Huawei devices. So far, there has been no evidence to suggest that Huawei has engaged in espionage, but security concerns have been raised after a report by the UK National Cyber Security Centre found “serious vulnerabilities” in the company’s 5G technology.
However, even without the US market, Huawei overtook Apple as the second biggest smartphone brand in Q1 2019, only beaten by Samsung, as sales increase by nearly 50% year-on-year.
According to The Verge, Apple’s iPhone shipments shrunk from 52.2 million in first quarter of last year to somewhere between 36 million and 43 million this quarter. This suggests that the big players in the smartphone market are having to make room for others.
Overall, global smartphone shipments declined 5% year-on-year in Q1 2019. This is now the sixth consecutive quarter in which shipments fell in the global smartphone market. However, Huawei appears to be bucking this trend, as one of just three smartphone companies to experience growth in this period.
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Research Analyst, Shobhit Srivastava believes that this is down to Huawei’s focus on innovation, with features such as punch-hole cameras, on-board AI, and a focus on 5G technology, compared with Apple’s slower adoption of the newest technologies. However, its dual-brand strategy (offering both high-end and lower priced models) has also boosted Huawei sales:
“At this pace, we expect Huawei to remain ahead of Apple at the end of 2019. What has helped Huawei is the pace of its innovations. It was the first to introduce features like reverse wireless charging, on-board AI, advanced camera, and more. A dual-brand (HONOR) strategy has helped Huawei build a connection to younger profile consumers and gain additional market share in a sluggish Chinese market. Huawei is now a match for Samsung in smartphone hardware. Like Samsung and Apple, Huawei also is becoming increasingly vertically integrated. We believe it is Huawei that Samsung should be worrying about rather than Apple.”
This also indicates the growth of Chinese brands in this market. Brands registering growth are currently all from China.
Srivastava believes that Chinese brands look likely to continue their expansion into Europe:
“Chinese brands continue to defy gravity by expanding outside their home markets. Top Chinese brands are now following a dual-brand strategy to cover the maximum number of price bands and to appeal to different market segments. After entering South East Asia and India, leading Chinese original equipment manufacturer (OEMs) are looking to expand in Europe, and develop their positions in higher price bands, increasing their ASPs. The shift in focus of Chinese OEMs is clearly visible as Europe becomes their place of choice to launch new flagship models.