Huawei widens lead in China smartphone market after US ban: report

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A Huawei offline shop on Sept 28, 2019 in Beijing. (Image credit: TechNode/Coco Gao)

Huawei’s handset shipments in China rose two-thirds during the third quarter, helping the firm to hit a market share of 42%, data from market research firm Canalys shows.

Why it matters: The data indicates that the world’s second-largest smartphone maker has fared well at home despite the US blacklisting that is impairing performance overseas.

  • Chinese consumers rallied behind the company after Washington moved to bar the Chinese telecoms giant from doing business with American companies.
  • A sense of patriotism is likely to be a key driver of the sales surge as 42.9% of Chinese consumers intend to choose Huawei when switching from iPhones.

Details: This quarter marks Huawei’s sixth consecutive quarter of double-digit growth, and places the Shenzhen-based company way ahead of its competitors with a 25 percentage-point lead over second-placed Vivo.

  • Huawei smartphone shipments in China expanded 66% year on year to 41.5 million units, despite the overall market shrinking 3%.
  • As Huawei consolidated its position in the market, all other vendors lost ground. Vivo supplanted Oppo in second place, while Xiaomi fell to fourth, Canalys said.
  • Apple kept hold of fifth place in part due to September’s iPhone 11 launch. The new handset made up 40% of its shipments in the period.

“Huawei opened a huge gap between itself and other vendors. Its dominant position gives Huawei a lot of power to negotiate with the supply chain and to increase its wallet share within channel partners.”

-Nicole Peng, vice-president of mobility at Canalys

Context: The US ban, enforced in May, cut off Huawei from key suppliers, including chipmakers and Google’s Android operating system used in its devices.

  • In response, Huawei announced it was building its own OS and, most recently, entered the electric vehicle business.
  • As Washington officials urge world leaders in politics and business to shun Huawei from 5G networks, Huawei claims to have secured more than 50 contracts worldwide.
  • On Monday, a report by the Sunday Times claimed that the UK, one of the US’s closest allies, is preparing to allow Huawei to be involved in the development of next-generation communications.