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Huawei beats Apple to become second-largest smartphone maker | Technology

Huawei overtook Apple to become the world’s second-largest smartphone seller behind Samsung in the second quarter, the first time in seven years that any contender has managed to split the top two.

Multiple market analysts said that Huawei’s rise came as the slowdown in China, the world’s largest market for smartphones, eased, with growing market share in Europe. Huawei failed in its recent bid to launch in the US after government action against companies deemed a security threat.

Despite Apple being historically weak in the second quarter, analysts described the rise of Huawei as significant.

“The importance of Huawei overtaking Apple this quarter cannot be overstated,” said Canalys analyst Ben Stanton. “It is the first time in seven years that Samsung and Apple have not held the top two positions.”

Approximately 351m smartphones were sold globally in the second quarter, down 2% year-on-year due to market saturation, increasing prices, longer replacement rates, reduced mobile phone network subsidies and lack of feature and design innovation, according to data aggregated by the Guardian.

“Consumers remain willing to pay more for premium offerings in numerous markets and they now expect their device to outlast and outperform previous generations of that device which cost considerably less a few years ago,” Anthony Scarsella from IDC.

Samsung was worst hit by the slowdown of the big three, down 10% year-on-year selling 71.9m smartphones for a 20% share of the market. Huawei raced into the second spot selling 54.2m phones in the quarter, up 41%, for a 15% share of the market. Apple sold 41.3m iPhones, up 1%, for a 12% market share.

“The continued growth of Huawei is impressive, to say the least, as is its ability to move into markets where, until recently, the brand was largely unknown,” said Ryan Reith, programme vice president of IDC’s Worldwide Mobile Device Tracker.

Stanton said: “Huawei’s momentum will obviously concern Samsung, but it should also serve as a warning to Apple, which needs to ship volume to support its growing services division.





If Apple and Samsung want to maintain their market positions, they must make their portfolios more competitive.’’



‘If Apple and Samsung want to maintain their market positions, they must make their portfolios more competitive.’ Photograph: Elijah Nouvelage/AFP/Getty Images

“If Apple and Samsung want to maintain their market positions, they must make their portfolios more competitive.”

Tarun Pathak from Counterpoint Research said that Huawei’s two-pronged strategy using its fast-growing Honor sub-brand to capture the mid-tier segment below £500 and its premium Huawei-branded smartphones at the top end, such as the P20 Pro, appeared to be working.

Analysts said that Huawei’s exclusion from the US has forced it to work harder across Asia and Europe to achieve its growth goals, with its mid-range models proving particularly popular. Data from Canalys showed that Huawei grew it market share in China by 6% to a record 27% in the quarter, where 100m smartphones were sold across the country.

Outside of China, Huawei’s increasing brand recognition newly allowing it to compete at the top end, but the Chinese market remains key for Huawei as it has come under fire from the US, Australia and other nations over concerns it could facilitate Chinese government spying.

Huawei has denied it facilitates spying and has said it is a private company not under Chinese government control and not subject to Chinese security laws overseas.

China and the US are also embroiled in a trade dispute with both nations imposing tariffs on billions of dollars worth of goods and fighting over technology and patents, which analysts said creates significant uncertainty for all of the major smartphone brands.

Huawei said Tuesday that overall it had 15% higher revenue in the first six months of 2018, steady at levels seen a year ago. Revenue rose to 325.7bn yuan (£36.52bn), while operating margin rose to 14%, from 11% a year ago.

Huawei’s consumer division, which houses its smartphones business, accounted for roughly a third of its total revenue last year. It got half its revenue from its mobile phone network.


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