The next news can only be published under the heading “not again, but again”. Once again, it is impossible to ignore the news that Huawei manages to maintain its leading position and outstrip many other manufacturers. Once again, according to the results of the quarter, the company became the leader in sales, ahead of even Samsung. All this despite the fact that they do not even think about taking the company out of the sanctions. As usual, there is a simple explanation for this, only it once again contradicts analysts’ forecasts. As the saying goes, “it sinks, sinks, but will not sink in any way.” What’s going on with this company?
How is Huawei
Huawei surpassed Samsung as the world’s largest smartphone manufacturer in the second quarter of 2020, according to a Canalys report.
This happened against the backdrop of how some time ago analysts at Counterpoint Research were skeptical about Huawei’s leadership in global smartphone sales. So they commented on the fact that in April this year Huawei has outstripped Samsung in sales. Of course, this was associated with temporary changes against the background of the uneven spread of the coronavirus, but the assumption turned out to be incorrect.
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Interestingly, the Canalys report says that this is the first time in the last 10 years that a company other than Apple and Samsung has topped the ranking of global smartphone sales. And you say sanctions …
Now all companies have suffered from the global decline in sales and they have to do something. Huawei is also fighting this fight, but besides this, it still has to somehow explain to people that there is life without Google services and continue to develop its AppGallery app store.
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Of course, Huawei is helping the growth of demand in the domestic Chinese market, where compatibility with Google is not important to anyone, but the company manages to top the rankings in other countries.
For example, according to many analytical agencies, Huawei and Honor smartphones lead the popularity rating in Russia and are among the top three in many European countries. Most likely, this is due to the fact that they are inexpensive (the company makes a lot of promotions to stimulate demand in difficult times), and most users are satisfied with what AppGallery has – instant messengers, social networks, Yandex applications (in Russia).
However, it was still China that became one of the first countries to largely recover from the effects of the pandemic, and Huawei’s activities in that country have had a large positive impact on the company’s success. To understand the picture, suffice it to say that in the second quarter, China accounted for 72% of the company’s total shipments. In the first quarter this figure was 61%, and last year it was just over 50%. The Chinese helped soften the fall, but the company was able to somehow minimize losses in the global market.
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How much fewer phones Huawei began to sell
In the second quarter, shipments of Huawei smartphones decreased by 27%. This is significant, but everyone lost, and many even more. For example, Samsung cut shipments by 30% for the quarter. These are global losses, and the fact that China is “dragging” Huawei, says Samsung’s market share in this country – only 1%.
If we set aside very relative percentages and speak in specific terms, then Huawei shipped 55.8 million devices in the second quarter of this year. During the same period, Samsung was able to sell only 53.7 million handsets according to its data. Some analysts predicted approximately the same figures for this quarter. At least towards the end of the quarter, few people were surprised by the leadership of the telecommunications giant.
This is a remarkable result that few would have predicted a year ago, ”said Ben Stanton, senior analyst at Canalys. – If it were not for COVID-19, this would not have happened.
What will happen to Huawei due to sanctions
Despite the fact that Huawei has gathered will in a fist and was able to realize all its strengths, it cannot yet be said that the success will be long. We do not know if the company will be able to continue like this and how long it will last. As more countries recover from the effects of the pandemic, the company’s US trade ban is likely to continue to affect its global performance. But so far the global problem has played into the hands of the company and, along with competent management, has made it easier for it to survive the transition period.
This is quite obvious if we judge by the data for 2019. Just prior to the ban, Huawei increased its global shipments by 61% in Q1 2019. The company reportedly expected its problems in March to cut sales by 20% in 2020. It is not yet clear what will happen in the end, so we will return to this conversation closer to the end of the year.
How do you feel about Huawei and are you ready to continue buying its smartphones despite some restrictions. Naturally, taking into account the discounts that the company gives.
I also note that Samsung can expect a short-term increase in device shipments in the second half of the year after the August 5 event and the announcement of the Galaxy Note 20 series. So we just wait and see what happens next.