Huawei has toppled Samsung to be the biggest smartphone seller in Q2 2020. Even with trade sanctions imposed by the U.S, it’s surprising to see Huawei lead the smartphone market.
According to Canalys, Huawei shipped 55.8 million devices in Q2 2020 which is down 5% year on year. Whereas, Samsung shipped 53.7 million phones in the same period, a 30% fall against Q2 2019.
Due to the COVID-19 pandemic, the smartphone market has experienced a significant drop in growth. As businesses are in the recovering process, smartphones are not being manufactured at the same rate as they used to.
This is largely due to lockdown measures applied in various parts of various countries. This has also affected the availability of smartphones in Nepal as many smartphones are right now out of stock.
Home Advantage for Huawei
The main reason for Huawei’s success in Q2 2020 is due to increased smartphone shipments in its home market. They have increased their shipment in China by 8% whereas as Samsung has less than 1% of the total market share in China.
The outbreak started in China but they have managed to bounce back quickly and are back to relatively normal conditions as factories have reopened. And, since 70% of Huawei’s shipments are in China they are in better shape than Samsung. Whereas, Samsung has been hit hard as it’s major markets like Europe, Brazil, India, and the U.S are still rattled by the COVID-19 pandemic.
Actually, Huawei smartphone shipments have also dropped by 27% in the overseas market similar to Samsung. So, it’s the home market that has really helped Huawei to strengthen it’s smartphone sales even during this pandemic.
Future Threats for Huawei
It’s impressive that Huawei has managed to be the biggest smartphone market vendor even after U.S trade sanctions. With, trade sanctions in place, Huawei cannot license Google Mobile Service (GMS) for new smartphone models.
Customers in European markets rely on GMS and related Google Play Services. Huawei has been working on Huawei Mobile Service as an alternative to GMS along with Huawei AppGallery but many developers have not yet adapted to HMS. Furthermore, Huawei has even launched a Petal search that allows Huawei consumers to find and install apps that are not available on HMS.
But, recently the U.S has blocked many chip makers from supplying HiSilicon Kirin SoCs to Huawei. The rule prevents foreign manufacturers who use American technology from shipping products to Huawei unless they get a license from the U.S. This has gravely affected TSMC based on Taiwan which makes most of HiSilicon Kirin chips.
So, Huawei ‘s ability to create new smartphones is in great jeopardy due to the ongoing trade sanctions.
Huawei’s jump to the number 1 smartphone vendor is largely due to the ongoing pandemic which has effected other manufacturers like Samsung more than Huawei.
So, when the world recovers, it will be hard for Huawei to retain the top spot. On top of that, U.S trade sanctions are making it more difficult for Huawei to garner overseas markets.