Context, as they say, is everything. Read headlines this week that praised Huawei for “overtaking, “Same”eclipsing“, Samsung to become the world number one in smartphone sales,” despite US sanctions “, one would think that Trump’s blacklist has been derailed. Capturing the crown from Samsung has always been Huawei’s ambition – and the company seemed on the right track before the blacklist came in last May.
Since the blacklist arrived, however, it’s a very different story. Google’s loss of the new phones overcame them in major international markets. Huawei has stepped up efforts to build a Third Way, a new version of the Android ecosystem it dubbed Huawei Mobile Services, and which aims to break Google’s lock on its users. Doing this is a huge challenge.
And so, unsurprisingly, Huawei was quick to celebrate its rise to world number one for the first time, “demonstrating exceptional resilience in times of trouble,” he said. Does this success mean that Huawei “doesn’t need Google’s help to be successful,” like a tech site suggested? Does this really represent a major setback for the Trump administration’s campaign against the company?
Absolutely not. In reality, nothing has changed. Huawei securing the top spot for the second quarter is the result of three things – none of which involved it beating the blacklist. First, Huawei has had staggering sales success in its Chinese home market, increasing its market share from 33% in the same quarter last year to 46% this time around, at the expense of its local competitors.
Second, China was the first to block COVID-19 and therefore was the first major market to emerge from it. This has translated into a rebound in smartphone sales in Huawei’s strongest market, while Samsung’s main markets – the United States, for example – have fallen behind. The extent of Huawei’s dominance in China, the world’s largest smartphone market, was enough to influence the global rankings.
And, third, Huawei has managed to extend the lifespan of its pre-blacklisted phones through a series of facelifts, adding sales in European markets where new flagship products not Google have been falling flat on. And although it had a modest impact given that 70% of Huawei’s phone sales were in China, the difference between Huawei and Samsung was marginal – 55.8 to 54.2 million or 55.8 to 53.7 million. , according to the report, and therefore everything helped.
For Huawei, 2020 would always have been a scorching year. The company warned him in its New Years message to staff, and nothing that has happened since has suggested that those warnings were wrong. Smartphone sales had become the main driver of Huawei’s growth and profitability before the blacklist, and now it boils down more to phone sales in China. This is serious overexposure and will not diminish anytime soon.
Until May, the problem with Huawei’s smartphone sales – outside of China, where Google is banned – was the loss of American software and services. But the blacklist was extended in May, on its first anniversary, and now Huawei also faces restrictions on advanced chips in its flagship products. Beyond smartphones, it has hit Huawei hard in the 5G equipment market. Chinese consumers here cannot tell the difference. And while Huawei is guaranteed the lion’s share of 5G network kit sales in China, it is losing deals elsewhere, including the UK, because of this US blacklist.
The news of the ranking of smartphones is significant, “marking the first quarter in nine years where a company other than Samsung or Apple has dominated the market,” but that doesn’t matter when it comes to US sanctions – it doesn’t mean anything to us. the real The news is that Huawei’s dominance in China and Samsung’s coronavirus-related sales delay elsewhere have coincided. And so the results for the rest of the year will be more tied to the economic recovery than anything Huawei or Samsung can do.