For the first time ever in a quarter, China-based Huawei shipped more smartphones around the world than any other vendor, says Canalys.
Move over Samsung, there's a new smartphone king in town, according to the latest results from research firm Canalys.
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During the second quarter of 2020, Huawei shipped more smartphones globally than any other vendor, overtaking Samsung for first place, Canalys said on Thursday. For the quarter, Huawei shipped 55.8 million devices, a decline of only 5% from the same period in 2019. Over the same time, second-place Samsung shipped 53.7 million smartphones, a 30% nosedive from last year's second quarter.
Huawei can thank its home base of China for its rise to the top of the smartphone market. Outside of mainland China, the company is subject to US government regulations and sanctions, one reason its overseas shipments dropped by 27% last quarter.
But after being shaken by the coronavirus outbreak earlier this year, China has arisen strongest of all the countries impacted by the pandemic. Factories have reopened, economic development has continued, and tighter controls have been implemented against new outbreaks, according to Canalys. With all these factors combined, Huawei now sells more than 70% of its smartphones in mainland China.
"This is a remarkable result that few people would have predicted a year ago," Canalys senior analyst Ben Stanton said in a press release. "If it wasn't for COVID-19, it wouldn't have happened. Huawei has taken full advantage of the Chinese economic recovery to reignite its smartphone business."
Samsung, on the other hand, has less than a 1% market share in China, therefore it's benefited little from the country's recovery from the virus. At the same time, the company has seen its shipments fall in such regions as the US, Europe, Brazil, and India, which have been hurt by COVID-19 outbreaks and associated lockdowns, Stanton added.
"Taking first place is very important for Huawei," Canalys analyst Mo Jia said in a press release. "It is desperate to showcase its brand strength to domestic consumers, component suppliers, and developers. It needs to convince them to invest and will broadcast the message of its success far and wide in the coming months."
But a continued dependence almost solely on China is not a sustainable strategy. Yes, China has been the world's largest smartphone market for a number of years. But to remain a global leader, a company needs to continually expand its customer base, especially as other countries begin to recover from the pandemic.
The obstacle is that Huawei has engendered a strong sense of suspicion about it, partly due to its close ties with the Chinese communist government. Led by the US, many have accused Huawei of being a security threat and of violating certain sanctions.
"It will be hard for Huawei to maintain its lead in the long term," Jia said. "Its major channel partners in key regions, such as Europe, are increasingly wary of ranging Huawei devices, taking on fewer models, and bringing in new brands to reduce risk. Strength in China alone will not be enough to sustain Huawei at the top once the global economy starts to recover."
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