Huawei extends its dominance in China's smartphone market at Apple's expense
Despite being blacklisted by the US, Huawei phone shipments grew 66% while Apple, Oppo, Vivo and Xiaomi shipments all declined
China’s leading smartphone maker Huawei Technologies has further extended its dominance in the domestic market, eroding the market share of all other competitors amid an ongoing US technology ban which has seen Chinese consumers rally behind the brand.
In the third quarter, Huawei’s phone shipments grew 66% year on year to 41.5 million units, according to an emailed research note issued by Canalys on Wednesday. Huawei has now amassed a record market share of 42.4% in China compared to 24.9% in the same period last year.
All other major smartphone brands reported more than 20% declines each during the three-month period, with Xiaomi slumping the most at 33%. Vivo, Oppo and Apple, the second, third and fifth largest vendors in China, reported 23%, 20% and 28% declines in shipments respectively during the quarter, according to Canalys.
In mid-May Huawei and 68 affiliates were placed on a US trade blacklist that prevents them from using US technologies and software without approval.
The trade ban caused Huawei to delay sales of its newly launched Mate 30 smartphone series in Europe, the company’s biggest market outside China, because the handsets have no access to Google apps and services, but it has yet to have any impact on domestic sales. To the contrary, the action by Washington over national security concerns has given a huge boost to Huawei’s domestic sales as mainland Chinese consumers show allegiance to the brand, largely at the expense of Apple.
Huawei’s shipments in the latest quarter are equal to the combined shipments of the three other major Chinese brands Vivo, Oppo and Xiaomi, and eight times that of Apple’s 5.1 million iPhone quarterly sales in China.
Huawei, which has shipped more than 200 million phones globally this year, is also getting close to the target set by its mobile chief Richard Yu Chengdong, who vowed to secure 50% of the domestic market by the end of this year.
Analysts believe Huawei’s dominance in China will be difficult to challenge given the Shenzhen company’s lead in 5G technology and handset designs.
Huawei is in a strong position to consolidate its dominance further amid the 5G network roll-out, given its close relationships with operators in the country’s 5G network deployment as well as control over key components such as local network compatible 5G chipsets, according to Nicole Peng, Canalys vice-president for mobility.
“This puts significant pressure on Oppo, Vivo and Xiaomi, which will find it very hard to make any breakthroughs,” Peng said.
Last week, Huawei launched its long-awaited foldable 5G smartphone in China with a price tag of 16,999 yuan (US$2,405), the most expensive handset to be offered in the world’s largest smartphone market. Despite the price tag, Huawei’s foldable Mate X is believed to be a hard-to-get item in China where expensive, limited offerings are keenly sought after.