News: 1596115808

It almost seemed like a mission impossible but Huawei has defied all expectations – including its own – by outshipping rival handset maker Samsung to become the world's biggest shifter of smartphones.

In calendar Q2, Canalys numbers indicate Huawei dispatched 55.8 million devices worldwide, down 5 per cent year-on-year. Trailing behind in second place was Samsung, which shipped 53.7 million smartphones – or 30 per cent fewer phones.

These are the types of numbers that only really make sense during a global pandemic. As we all know, Huawei's Consumer Business Group (CBG) suffered a devastating blow last year, when the [1]Trump administration barred it from licensing US-made tech without prior permission.

This decision resulted in Huawei being unable to [2]license the proprietary Google Mobile Services software for Android , meaning its latest devices (with few exceptions) have shipped without the Google Play Store.

Huawei's latest smartphone for the UK market costs £1,299. And yes, that's without Google apps [3]READ MORE

Few in the West would countenance the idea of buying an Android phone without the mainstream Android app store, and that played out in Huawei's shipment figures: Mainland China accounted for 72 per cent of all shipments in Q2 2020, compared to 64 per cent in Q2 2019, and 51 per cent in Q1 2019, before the sanctions against the company started to bite.

China, obviously, is a huge market. With a population of 1.39 billion, it's larger than both the US and EU combined. Meanwhile, China's middle class continues to grow – resulting in a greater appetite for luxury goods.

There's another dynamic at play. Q2 2020 saw most economies in the Western World enter a period of lockdown caused by the COVID-19 pandemic. Not only has this reduced the opportunity to buy electronic goods, but it's also bred economic uncertainty.

As a global player, Samsung is more exposed to these locked-down economies. For example, it – along with Apple – accounts for roughly 90 per cent of all US in-store carrier sales.

In the same period, China drastically loosened its lockdown, with its economy closer to returning to business as usual. That breeds the kind of consumer confidence required for people to invest in a new phone.

Of course, there's a valid question whether Huawei can sustain this position in the long term. Although Chinese consumers aren't affected by the absence of the Google Play Store, since it doesn't operate in the country, there are other threats to its domestic business – particularly on the hardware side of things.

Following pressure from the US government, Taiwanese chip fabricator TSMC has said it [4]will no longer serve Huawei . That's troubling because TSMC is one of two companies that can fabricate chips using the same 7nm process used in its top-tier silicon. As a result, there's a possibility it could be forced to take a technological step back as it transitions to a [5]less advanced fabricator .

And that'll be a tough proposition for a firm that prides itself on its technological advances and steep R&D spending. It'll also put Huawei at a disadvantage when compared to local rivals, like Xiaomi and OPPO, which can buy the latest MediaTek and Qualcomm chips without problem.

Nonetheless, there's still hope for Huawei, argued Canalys analyst Ben Stanton, who pointed out the firm's historic resiliency to US pressure.

"Long-term, Huawei does have options, including potentially working with Samsung for Kirin silicon. But all options on the table will take time to scale," he said.

"For that reason, sustaining momentum in the short-term will be a huge challenge. That said, it has component stockpiles which should last into next year, and it has already proved itself remarkably resilient and adaptable. It is also worth noting that there may be a new US administration in place by that time, which I am sure Huawei would welcome. But unfortunately it cannot afford to wait to make critical decisions on Kirin production."

Huawei had set it sights on becoming number one in smartphone sales in 2020 but, after the trouble with a certain orange-faced blob in the US, had reined in its ambitions. Predictably, Huawei was fairly chuffed with today's news.

"Our business has demonstrated exceptional resilience in these difficult times," the company said. "Amidst 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.

"As we look towards the future, where 5G, AI and IoT will grow increasingly ubiquitous, our focus will remain on executing our All-scenario Seamless AI Life Strategy. Our technology – from smartphones, tablets through to PCs and wearables – is grounded in our commitment to consumers and fulfilling their needs." ®

Get our [6]Tech Resources



[1] https://www.theregister.com/2019/05/15/president_trump_huawei_emergency_ban/

[2] https://www.theregister.com/2019/05/20/google_pulls_play_and_other_services_from_huawei/

[3] https://www.theregister.com/2020/06/11/huawei_p40_pro_plus_release/

[4] https://www.theregister.com/2020/07/16/tsmc_huawei_chips/

[5] https://www.theregister.com/2020/07/16/chinas_homegrown_chip_foundary_smic/

[6] https://whitepapers.theregister.com/