Huawei firmly stands as world’s 2nd smartphone manufacturer, Xiaomi 4th despite losses

China’s leading smartphone manufacturer and communication giant Huawei stands firmly as the world’s second largest in terms of global smartphone shipment volume and market share in the second quarter of this year, International Data Corporation (IDC) said yesterday.

Samsung remains as the leader with Apple placing itself in the third place. Huawei overtook Apple in global smartphone sales in June 2017, according to an earlier report by Counterpoint Research.

IDC’s data say Huawei’s shipments during the second quarter of 2018 hit 54.2 million units. Compared to the same period last year, the company’s smartphone market share increased 43.6% and shipments increased 40.8%, while global shipments declined 1.8%.

IDC’s latest data on the top 5 global smartphone manufacturers in terms of shipments and market share for the second quarter of 2018. (Image Credit: IDC)

Huawei’s ambitions are even higher

The company has its own ambitions beyond the quarterly report. Huawei announced last month that by July 18, it had sold over 100 million smartphones since the beginning of this year. The company said the 2018 target plan is 200 million units (in Chinese). The figure is close to Apple’s 215.8 million total 2017 shipments and 130.6% of Huawei’s 2017 annual figure, calculated from a 2017 IDC report.

Meanwhile, Honor, an e-brand under Huawei Group, said yesterday that their sales performance abroad during the first half of the year increased 150% compared to the same period in 2017, according to local media. Zhao Ming, president of Honor, said growth figures for India, UK, and Spain are 300%, 200%, and 500% respectively. He also said Honor’s competition with Xiaomi, another China’s leading smartphone brand, is over. Honor’s goal is to be the 5th global brand by 2020.

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Made-in-China

What is interesting is that IDC’s latest report highlights the concept of Made in China. While it’s still common to link the term with the “world’s factory” and cheap products, at least in the smartphone market, we see an extra layer of added premium value.

Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers, says that in most markets worldwide, Apple, Samsung, and Huawei are the major players in the ultra-high end ($700+) competition. Although the market share in the ultra-high-end may vary geographically, IDC believes this phenomenon would remain in the near future.

While Chinese companies’ common price-for-value strategy and brand identity have brought smartphone manufacturer Xiaomi and OPPO to the 4th and 5th place of the IDC report, the two players’ commercial profitability capability remains an issue.

Xiaomi reported a net loss of RMB 43.9 billion for the whole of 2017 and RMB 7 billion for the first quarter of 2018. Huawei didn’t specify its profit for the period but confirmed an operating profit ratio of 14%, the 4th year above 10% since 2014.