Despite aggressive sanctions from the US government, Huawei has become the world̵7;s No. 1 smartphone maker, according to Canalys. 55.8 million shipments of the company’s smartphones in Q2 2020 ranked it first in the Canalys’ ranking, a quarter, meaning that the company moved first to Samsung for the first time.
Huawei’s main position is not really caused by beating US sanctions. Compared to last year, Huawei’s sales actually decreased slightly, but at the age of the coronavirus, the significant profit is only “slight”. Huawei’s sales fell 5 percent from the previous quarter, but Samsung’s sales fell 30 percent year on year. Samsung’s dramatic drop was enough to give Huawei the best place to 55.8 million, compared to Samsung’s 53.7 million.
Canalys shows that smartphone sales are almost universally reduced this year, with total deliveries down 14 percent compared to Q2 2019. The only company with growth is Apple, which ranked 3rd, an incredible 25 percent. Canalys attributes a lot of success to the new iPhone SE and claims that “[i]The new iPhone SE was critical this quarter, accounting for about 28% of its global volume, while the iPhone 11 remained a strong bestseller at almost 40%. ‘ “
It is a surprise that Huawei claims to be the top spot for smartphones due to US government export restrictions, but the sanctions have an effect. Huawei is declining like a rock in the global market with at least a 26 percent drop in international sales over the past three quarters. Huawei compensates this loss a bit with a higher market share in China. In Q1 2019, Huawei’s shipments split almost evenly between China and the global market, at 51% and 49%, respectively. According to Canalys, Q2 2020 sold 72 percent of its phones in China, with only 28 percent of global sales.
Huawei may survive the COVID economy for the time being, but for the company, the situation will only worsen in the future. Canalys warns that “[s]Power alone in China will not be enough to keep Huawei at its peak as the global economy begins to recover. Thanks to the export ban, Huawei is not allowed to ship Android applications from Google on new models, which kills Huawei’s appeal outside China (where Google applications are not equally available).
Huawei cannot use US chips or technology in its products, but thanks to its own HiSilicon chips division, it has been able to stay afloat in China. However, Huawei will soon face a problem with chips: TSMC, the world’s leading silicon foundry, said it would have to cut off Huawei from deliveries after September 14th. Huawei is clearly planning this and stocking up on huge orders, but this stock, like Huawei’s success last quarter, won’t last forever.