Report: Huawei overtook Samsung in Q2 2020 to become the #1 smartphone vendor

The Huawei Consumer Business Group (CBG), which both the Huawei and Honor smartphone brands are part of, has achieved incredible growth in the last few years. The Chinese technology giant is a major player in not only its home market of China but also in certain markets in Europe and other parts of Asia. The company’s growth has led them to become the #1 smartphone vendor in the second quarter of this year, finally overtaking Samsung. That’s according to a new report by technology analyst firm Canalys.

Canalys‘ data shows that Huawei shipped 55.8 million devices in Q2 2020, while Samsung shipped 53.7 million phones in the same period. As a result of the smartphone market contraction brought upon by the COVID-19 pandemic, Huawei’s smartphone shipments actually dropped 5% year-on-year. However, Samsung’s smartphone shipments dropped a whopping 30% in the same period, which is what has allowed Huawei to overtake Samsung as the global smartphone vendor. In response to this news, Huawei issued a statement saying that their business has “demonstrated exceptional resilience in these difficult times. Amidst a period of unprecedented global economic slowdown and challenges, we’ve continued to grow and further our leadership position by providing innovative products and experience to consumers.”

There’s a big caveat with these smartphone shipment numbers, though. Much of Huawei’s success in Q2 2020 came from increased smartphone shipments in its home market of China where they increased shipments by 8%. In contrast, Samsung has a minuscule presence in China, with only less than 1% of the total market share. Samsung’s core markets including Brazil, India, the U.S., and Europe have been ravaged by the COVID-19 pandemic, and their economic activity contracting as a consequence. In these overseas markets, Huawei’s smartphone shipments actually dropped 27%, a decrease similar to the one Samsung suffered.

Samsung and Huawei’s worldwide smartphone shipments in millions of units tracked from Q1 2015 to Q2 2020. Source: Canalys.

This data is surprising for a big reason. First, U.S. trade sanctions have threatened Huawei’s ability to make new Android smartphones since 2019. With the sanctions in place, Huawei cannot license Google Mobile Services (GMS) for new smartphone models, which means that the company’s latest smartphone models do not ship with the Google Play Store or Google Play Services. Users in Western markets rely on many apps that are either downloaded from the Google Play Store or depend on APIs within Google Play Services. While Huawei offers its own alternatives to the Google Play Store and Google Play Services in the form of the Huawei AppGallery and Huawei Mobile Services (HMS) respectively, many developers have not yet adapted their apps for deployment on HMS-only devices. Huawei has continued to sell smartphones with GMS on board thanks to a clever trick: Rebadging older, already-Google-certified models as new releases with slight design changes. However, this tactic of rebadging older models, as well as the company’s ability to create truly new smartphone models, is in jeopardy with the recent news that contract chip-makers have been barred from using U.S.-developed technology to fabricate chips for Huawei’s HiSilicon. The former measure affects the Chinese market very little, though, as the Chinese app ecosystem is wholly decoupled from Google already, while the latter measure is too recent for us to see the effects of in Q2 2020 smartphone shipments.

Then there’s the fact that we’re still in the middle of the COVID-19 pandemic, the economic effects of which have grown substantially during Q2. With the pandemic came a global recession as stay-at-home orders have affected both supply and demand for new smartphones. It’s thus no surprise to learn that the smartphone market contracted significantly this quarter. Huawei’s lead this quarter can be partly attributed to the effects on the market from the pandemic. Although the outbreak started in China, the country has managed to bounce back to relative normality as factories have reopened and new outbreaks are tightly controlled. Smartphone sales in the country are, thus, returning to normal, and since 70% of Huawei’s shipments are in China, they have weathered the storm better than Samsung.

It may be difficult for Huawei to maintain this lead going forward, though. As President Trump’s administration keeps imposing harsher trade sanctions on Huawei, it will become increasingly difficult for the company to compete in the global smartphone market. When the world recovers from the COVID-19 pandemic, the economy, and thus, smartphone shipments, will bounce back. China may be Huawei’s most important market, but it won’t be enough to keep Huawei at the #1 spot for much longer.

The post Report: Huawei overtook Samsung in Q2 2020 to become the #1 smartphone vendor appeared first on xda-developers.

from xda-developers https://ift.tt/33gt9PX
via IFTTT