Huawei loses leadership in Chinese market due to US sanctions

By Sayujya S, Desk Reporter
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The Chinese tech company Huawei is starting to see the effects of US sanctions in its home country China, which is also its biggest market, after experiencing a dent in its global business. 

According to Counterpoint Research, a global research firm specializing in mobile & technology products, Huawei lost the top spot in China’s smartphone market in January 2021. Rival Oppo took the first spot for the first time, followed by Vivo, Huawei, Apple and Xiaomi.

The report says Oppo gathered 21 percent market share in China in January, while Vivo and Huawei had 20 percent each. Oppo and Vivo are both owned by BBK Electronics, which also owns brands Realme and OnePlus. Apple and Xiaomi were in the fourth and fifth spots with 16 percent market share each.

“Huawei along with HONOR has been constantly losing its share in the Chinese market due to component shortages following US sanctions, and fewer new launches. Its inventory for key components has been depleting and it will not be able to source 5G smartphone components. Over 65 percent of devices sold in China in Q4 2020 were 5G capable. Any absence of 5G models reduces the addressable market size for Huawei in China while the absence of Google services does the same for 4G devices,” Counterpoint said in a blog post.

US sanctions

Huawei Technologies, China’s first global tech brand, is at the center of conflict with the US over technology and security. American officials say the maker of network equipment and smartphones might facilitate Chinese spying, an accusation Ren and other executives deny.

Then-President Donald Trump cut off Huawei’s access to US processor chips and other technology needed to make smartphones in 2019. Last year, Mr. Trump tightened those curbs by prohibiting suppliers from using US technology to make chips for Huawei designed by its own engineers.

Counterpoint said the “declining trend” is expected to continue all through 2021 and other smartphone makers will take up the market share Huawei loses. The company had spun off Honor as a separate brand late last year to deal with the component shortages that sanctions have forced on it.

Huawei’s decline in the market started in August 2020, according to the post. The report said the telecom giant has “shifted its focus” to premium devices so that it can sell phones with higher margins, to “make the most of its depleting inventory of components.”

Read More: Huawei to make potential shift to EVs, may launch cars this year: Sources