Chinese smartphone giant Huawei is having a tough time outside China. But back home, it’s thriving.
In the second quarter of the year, Huawei accounted for 46% of smartphone sales in China—more than Vivo, Oppo, and Xiaomi combined, according to a new report by Counterpoint. This is Huawei’s highest market share in China ever, with its sales volume up 14% compared to the same quarter last year.
It comes as many users around the world are shunning Huawei phones because they no long include Google apps since the company was placed on a US blacklist.
“China has become the most important market for Huawei as its overseas shipments saw a sharp decline after it lost the ability to use [Google Mobile Services] in its latest smartphones,” Counterpoint analyst Flora Tang said in the report.
Earlier this month, Huawei said its revenue in the first half of 2020 grew 13.1% compared with the same period last year. This is despite the negative impact of the COVID-19 pandemic and ongoing US sanctions.
But Huawei’s gain means pain for its rivals. Vivo, Oppo, and Xiaomi saw smartphone sales decline 29%, 31% and 35% respectively. This comes as the country’s smartphone market faces an overall slowdown, declining 17% compared with the second quarter last year, Counterpoint data shows.
There is a silver lining, though. Sales got a slight bump in the second quarter over the first quarter, suggesting the market has started to recover from the COVID-19 pandemic.
Huawei is also benefiting from the fact that Chinese consumers are buying more 5G smartphones. Huawei has 60% of the 5G handset market in China, where consumers are buying more 5G phones than anywhere else in the world. A third of all smartphones sold in China in the second quarter were 5G-enabled, according to Counterpoint.
There was one notable exception to the 5G trend. Apple’s sales growth in China was more than double that of Huawei in the second quarter, growing 32% year over year, according to Counterpoint. This is thanks to the popularity of the iPhone 11 series and the new budget-friendly iPhone SE, neither of which support 5G.
Apple has also benefited from aggressive price cuts in the country. Apple devices typically cost a hefty premium in China compared with the base price in the US. But price cuts from Apple were so steep that some iPhone models cost almost the same as in US. Apple also participated in China’s midyear 618 shopping festival and promoted iPhones through live streaming, the latest online shopping trend in China.
This article was first published by Abacus News.
