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Huawei wrests crown of world’s biggest smartphone vendor from Samsung on strong China sales

Shenzhen-based Huawei shipped 55.8 million Android smartphones in the second quarter, edging out Samsung’s 53.7 million total tally in the same period.

Huawei Mate Xs Huawei Mate Xs. Source: Shutterstock

Huawei Technologies has overtaken Samsung Electronics for the first time in global smartphone shipments, driven by increased demand in China as the world’s second-largest economy recovers from disruptions caused by the coronavirus pandemic.

Shenzhen-based Huawei, the world’s biggest telecommunications equipment vendor, shipped 55.8 million Android smartphones in the second quarter, edging out Samsung’s 53.7 million total tally in the same period, according to the latest industry report from research firm Canalys.

“This is a remarkable result that few people would have predicted a year ago,” said Canalys senior analyst Ben Stanton in the report. “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.”

Stanton indicated that Samsung, which has a less than 1% share in China, “has seen its core markets, such as Brazil, India, the United States, and Europe, ravaged by outbreaks and subsequent lockdowns.”

It marked the first quarter in nine years that a company other than Samsung or Apple has led the global smartphone market, according to Canalys.

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Beyond showing Huawei’s strength under US sanctions, the achievement also reflects the Chinese economy’s resilience. China avoided a recession after its economy grew by 3.2% in the second quarter, the first major market in the world to show a recovery from the damage caused by the coronavirus pandemic.

The country’s economy had shrank by 6.8% in the first three months of this year, the first contraction since the end of the Cultural Revolution in 1976.

Although Huawei posted a 5% decline in second-quarter smartphone shipments from a year ago, Samsung recorded a steeper 30% fall in shipments as global demand slowed down.

“Our business has demonstrated exceptional resilience in these difficult times,” Huawei said in a statement released after the Canalys report’s publication. “Amid a period of unprecedented global economic slowdown and challenges, we’ve continued to grow and further our leadership position by providing innovative products and experience to consumers.”

Huawei shipped 72% of its smartphones during the second quarter in its home market, where it recorded an 8% increase in shipment volume from a year ago, according to Canalys.

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Smartphones are under Huawei’s consumer business group, the company’s biggest operating segment, which generated 255.8 billion yuan (USD 36.5 billion) in revenue in the first six months of this year. Huawei’s total revenue for the first half of 2020 reached 454 billion yuan, up 13.1% from the same period last year.

Huawei, however, continues to operate under pressure from the Trump administration, which has imposed trade sanctions on the company and moved to block the international deployment of its 5G network equipment because of security concerns. The Chinese firm has repeatedly denied the accusation that it is a security threat.

In May, Washington expanded its sanctions against Huawei by requiring foreign chip makers that use US technology to apply for a licence to sell chips to the Chinese company. That followed its inclusion in a US trade blacklist last year.

Huawei’s current lead in smartphone shipments will be hard to maintain in the long term, according to Canalys analyst Jia Mo in the same report.

“Its major channel partners in key regions, such as Europe, are increasingly wary of [selling more] Huawei devices, taking on fewer models, and bringing in new brands to reduce risk,” Jia said. “Strength in China alone will not be enough to sustain Huawei at the top once the global economy starts to recover.”

This article was originally published in the South China Morning Post