26 April 2019
Huawei has announced that it has shipped more than 200 million smartphones this year, continuing a scorching growth pace despite many challenges.  Photo: Reuters
Huawei has announced that it has shipped more than 200 million smartphones this year, continuing a scorching growth pace despite many challenges. Photo: Reuters

Can Huawei challenge Samsung’s position in smartphone market?

Huawei may be facing many troubles overseas, with the firm becoming a punching bag for the US and its allies and getting shut out from 5G equipment tenders, but that hasn’t prevented the Chinese company from making impressive strides in the global smartphone arena.

After besting Apple earlier this year and taking the title of the world’s No. 2 smartphone brand, Huawei has consolidated its position and is now closing the gap with Samsung, the top industry player.

The Chinese telecoms equipment giant announced this week that it has shipped more than 200 million smartphones this year, crossing that level for the first time in its history.

In a press release issued on Christmas Day, Huawei said it has achieved its revised 2018 shipments target of 200 million units, making for a bumper year, as flagship gadgets including the P20 series and Mate 20 series were received well in the market. 

Huawei’s growth in the smartphone industry has been nothing short of phenomenal, given that eight years ago its shipment number stood at just 3 million.

From 3 million units in 2010 to 200 million units in 2018, it represents roughly a sixty-six-fold growth. In 2017, the company sold 153 million smartphones before passing the 200 million unit milestone this year.

As for 2019, some industry analysts believe the Chinese firm could witness a further 20 percent, or even larger, growth in shipments.  

In the global smartphone market, Huawei “has gone from being dismissed as a statistical “Other” to ranking among the top 3 players in the world,” the company proudly said in its press statement.

And in the second and third quarters of 2018, Huawei became the world’s second largest smartphone manufacturer, with a global market share of 14.6 percent.

If the company continues its scorching shipments growth, it could pose a very real threat to Korean electronics giant Samsung, which currently has a global market share just above 20 percent.

Huawei smartphones initially had not been very attractive as most devices came as free gifts from wireless carriers when they signed up new customers. But the Chinese telecoms equipment supplier gradually developed its product line to compete with other leading brands.

The launch of Huawei P9 smartphone with a Leica endorsed camera was one of the turning points for Huawei to win more market attention, at a time when the market was dominated by Apple and Samsung.

Then the company started to build up P series and Mate series, as well as launching second brand Honor in China for the affordable market segment. Such strategy successfully helped Huawei to boost its shipments in both local and overseas markets in the past few years.

The Chinese firm successfully implemented a market segmentation strategy, helping it target women, professionals and young user groups.

All this helped Huawei expand its reach further in the market and score against other Chinese brands.

For example, Xiaomi is a brand known mainly for male users while Vivo is said to attract young women who love selfies. According to Huawei, its P20 series launched early this year has won over a large number of female users. Since its release in March, global shipments have exceeded 16 million units, with female users accounting for nearly half of that number, according to the firm.

The Mate 20 series features top hardware specification with big screen as well as the best camera endorsed by Leica. Within two months of the release of the Mate 20 series, Huawei had shipped over 5 million units. In addition, Huawei also has a mid-range nova series that has sold a total of over 65 million units, making it the leader of Huawei’s nascent line in that category.

Underlying the firm’s success is the fact that consumers have started to recognize Huawei as a brand with innovative ideas. According to a report by market research firm Ipsos, the Huawei brand has become associated with the idea that it keeps on progressing, and has strong innovation ability and trustworthiness in the eyes of its global consumer base.

Currently, Huawei smartphones are being used by more than 500 million consumers in more than 170 countries around the world.

It’s worth mentioning that the rise of Huawei owes in some part to failures on the part of Apple and Samsung in launching breakthrough and innovative products in the market to maintain user loyalty.

Apple’s iPhone only got a new design last year with a full screen, while Samsung struggled to rebuild interest in its flagship series after a battery explosion issue in its Galaxy Note 7 products three years ago.

And after the Note 7 debacle, Samsung has been suffering a significant decline in share in the China market. While Huawei is the number one player in China with more than 20 percent of the local smartphone market, Samsung was no longer in the top ten smartphone brand league in the country.

All in all, Huawei’s success in its home market and the fall of Samsung in China were the main factors that led to a big change in the smartphone market landscape.

That said, Huawei may not find it easy to aim for the top spot in the smartphone market worldwide. The company may come up with some really good hardware, but it will still face roadblocks from the US and other Western powers which harbor suspicions that Huawei gadgets pose a security risk due to the firm’s alleged links with Chinese authorities.

Huawei has repeatedly denied such allegations, calling them baseless and unfounded, and has stressed that it follows global rules on privacy protection.

The assurance, however, seems to fall on deaf ears, with the company now also becoming a victim of the trade tensions between China and the US. 

Given the Sino-US trade war and Washington’s apparent aim to keep Chinese tech giants in check, Huawei will find any shot at the global No. 1 rank in the smartphone industry far too ambitious. 

Samsung’s top rank appears to be safe — for now.

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EJ Insight writer

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