Huawei became the world’s largest smartphone player for the first time in the second quarter, a recent Canalys report reveals.
Most of its revenue comes from China as the U.S. tariffs are making its international market suffer.
According to the research firm, the Chinese vendor delivered 55.8 million smartphones, down 5% compared to last year. Meanwhile, Samsung shipped 53.7 million smartphones, which is a 30% decrease for the same period in 2019, pushing it to the second spot.
It’s the first time Huawei has snagged the top spot in a single quarter, an ambition it has had for many years.
But analysts cast doubt on whether this was sustainable given the fact that Huawei’s overseas markets outside of China have taken a hit as a result of U.S. sanctions which had severely damaged the company’s ability to use American technology to design and manufacture semiconductors produced for it abroad.
During the second quarter, Huawei sold more than 70% of its smartphones in mainland China. Meanwhile, smartphone shipments in foreign markets slumped at least 27% year-on-year, in the April to June quarter.
According to Counterpoint Analysis, the smartphone market share of the company in Europe, a key market for Huawei, dropped sharply to 16% in the second quarter versus 22% in the same timeframe in 2019. It is Europe’s third-largest smartphone manufacturer behind Samsung and Apple, showing how Huawei’s global role in the second quarter was based on efforts to increase its share in China, the second-largest economy in the world.
‘China’s huge population often propels its companies to a large “global” market share.
In a press release, Mo Jia, an analyst at Canalys, said, “it will be hard for Huawei to maintain its lead in the long term. 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.”
He added that the strength in China alone will not be enough to sustain Huawei at the top once the global economy starts to recover.
Huawei was listed on the US Entity List last year, a blacklist that limits the use of American technologies. That indicated that Huawei was unable to use licensed Google Android on its new flagship devices.
Not having Google apps on the phone is not a big deal for the citizens of China as services like Gmail or its search engine are essentially blocked by its government. Hence, Chinese customers are not used to using such products. But, not including Google is a big disappointment in foreign markets.
That’s one explanation why the market share of Huawei’s rivals, who are still able to use Android on their smartphones, has grown. Xiaomi, another Chinese smartphone maker, now has an increased market share in Europe, which can be attributed to this reason.
The Chinese telecommunications giant has faced increased scrutiny from Washington this year. The US had also adopted a new rule that requires foreign manufacturers who use US chip making to obtain a license, before selling semiconductors to Huawei affecting its ability to procure chips for its smartphones.