The logo of the Chinese company Huawei in their main British offices in Reading, west of London, on January 28, 2020.
Daniel Leal-Olivas | AFP via Getty Images
For the first time, Huawei has become the world’s second largest smartphone player, according to a report by Canalys.
Most of the sales come from China because its international business suffers as a result of US sanctions.
According to the research company, the Chinese seller supplied 55.8 million devices, 5% less year-on-year. Meanwhile, Samsung shipped 53.7 million smartphones, a decrease of 30% compared to the same period last year.
This is the first time that Huawei has captured first place in a quarter, an ambition it has had for several years.
However, analysts doubt whether this is sustainable given the fact that Huawei̵7;s foreign markets outside China have been affected by US sanctions against the company.
Huawei sold more than 70% of its smartphones in China in the second quarter. Meanwhile, smartphone deliveries to international markets fell by 27% year-on-year between April and June.
According to Counterpoint Research in Europe, a key region for Huawei, the company’s smartphone market share fell sharply to 16% in the second quarter from 22% in the same period in 2019. It is the third largest smartphone manufacturer in Europe after Samsung and Apple, which shows how Huawei ‘s global position in the second quarter stood in an effort to expand its stake in China, the world’ s second largest economy.
Given China’s vast population, successes often lead companies to large “global” market shares.
“It will be difficult for Huawei to maintain its leading position in the long run,” said Mo Jia, an analyst at Canalys, in a press release. “Its main channel partners in key regions, such as Europe, are increasingly cautious in locating Huawei devices, taking into account fewer models and introducing new brands to reduce risk.”
“Strength in China alone will not be enough to keep Huawei at the top as the global economy begins to recover,” he said.
Last year, Huawei was included in a blacklist of US entities that restricted its access to US technologies. This meant that Huawei could not use the Google Android license on its latest flagship devices.
In China, where Google services like Gmail or its search engine are effectively blocked, this is not a big deal because Chinese consumers are not used to using these products. However, Google is not hit hard in international markets.
That’s one of the reasons why Huawei’s competitors, who are still able to use Android on their devices, have increased in the market. In Europe, for example, the Chinese company Xiaomi recorded its market share from 6% in the second quarter of 2019 to 13% in the same period this year, according to a survey by Counterpoint Research.
Last year, Huawei was forced to launch its own operating system called HarmonyOS. However, analysts have questioned its success in international markets in the past due to the lack of key applications in the App Store.
The Chinese telecommunications giant faced further pressure from Washington this year. A new rule introduced in May requires foreign manufacturers using chip-making equipment in the United States to obtain a license before they can sell Huawei semiconductors.
This could affect Huawei’s ability to purchase chips for its smartphones. While Huawei designs its own processors, they are manufactured by TSMCs of Taiwan, which could be covered by this rule.