Huawei overtook Samsung as the top global smartphone vendor by shipments in Q2 2020, representing the first time a smartphone vendor other than Apple or Samsung has occupied the top spot in nine years.
Capitalizing on macroeconomic trends and its concentration of market share in China, Huawei overtook Samsung as the top global smartphone vendor by shipments in Q2 2020, according to Canalys.This represents the first time a smartphone vendor other than Apple or Samsung has occupied the top spot in nine years. Huawei shipped 55.8 million devices in Q2 2020, representing a 5% year-over-year (YoY) decline. Meanwhile, Samsung shipments fell by a precipitous 30% YoY, shipping only 53.7 million devices in Q2.
Huawei benefited from the comparatively strong performance of China's economy in Q2 2020. Even though China's GDP contracted by 6.8% in Q1 2020, it managed to mount a recovery ahead of other major markets in Q2 2020, when it posted 3.2% YoY growth in GDP, per CNBC. For a point of comparison, the US GDP fell by 9.5% in Q2 2020, the steepest decline since 1947, according to The Wall Street Journal.
Given this economic landscape, Huawei benefited its reliance on the Chinese market: 72% of Huawei devices shipped in Q2 went to consumers in Mainland China, and 7 out of every 10 smartphones sold in China came from Huawei in Q2, according to Canalys. Samsung's smartphone business is more diversified across markets, and it has virtually no market share in China — this gave Samsung greater exposure to the global economic crisis, though the South Korean tech giant said this week that it expects demand for smartphones to recover in the latter half of 2020.
Looking forward, we expect Huawei's smartphone shipments will become further confined to China, as it integrates HarmonyOS into its devices. Huawei has had a very difficult time selling its devices outside of China since the US cut it off from using Google services in mid-2019.
In four of the preceding five quarters, Huawei posted double-digit YoY declines in smartphone shipments outside of China, per Canalys estimates. Since the US-China tensions show no signs of abating, we expect Huawei will continue to pour resources into growing market share in China, while it essentially manages an exit from foreign markets that heavily favor Google smartphone services. This will align with Huawei's strategy to develop its HarmonyOS as a viable alternative to Google's Android platform, which will likely have limited appeal outside of China, forcing Huawei to rely even further on China for future growth.
Credits : https://www.eureporter.co/frontpage/2020/08/03/huawei-surpasses-samsung-as-global-leader-in-smartphone-shipments-thanks-to-market-share-in-china/
