Huawei targets #1 smartphone position beating Samsung next year

Huawei, the world’s second largest smartphone supplier, said it could become the world’s top vendor of smartphone in the final quarter of next year, Reuters reported.
Huawei sales up 8 percent in 2013, driven by telecoms Capex and smartphonesShenzhen-based Huawei, which has replaced Apple to become the second largest smartphone maker in the June quarter in the world despite concerns in the US, has also raised its forecast on smartphone shipments to more than 200 million in 2018.

The new target assumes importance because Democrats in the US market were told against using devices from Huawei and ZTE, another phone marker from China.

Research firm IHS Markit earlier said the strategy of Huawei is to shift to more value-added models, by launching new flagship smartphones with the latest features. This will assist the China-based phone maker to grab more share.

“Huawei’s P20 Pro is the first flagship smartphone model to be equipped with triple cameras, beating competitors to market. Increasing brand recognition in Europe and Asia is enabling the company to challenge Samsung in many price segments,” said Gerrit Schneemann, senior research analyst, smartphones, IHS Markit.

Analyst firm IDC said Huawei continues to lead the China smartphone market with a record-high market share of 27 percent in Q2 2018.
IDC chart on Huawei smartphone growthHuawei’s P20 / P20 Pro series found strong demand in the $600-$800 price segment, helping Huawei build a high profile in the market in the first half of this quarter. Huawei shipped 54.2 million smartphones for 15.8 percent share in Q2, said IDC.

Huawei conducted 618 promotions and achieved strong sales for Honor models in the online channels. The Honor brand continues to be an important driver of growth for the Chinese tech giant, said Ryan Reith, program vice president with IDC’s Worldwide Mobile Device Trackers.

Samsung has maintained a comfortable lead in the global smartphone market by shipping 71.5 million smartphones for 20.9 percent share. Samsung recently indicated that its mobile division revenues will face challenges moving forward.

Huawei’s fresh targets

Huawei expects full-year shipments to beat an initial target of 180 million after it shipped more than 95 million smartphones in the first half, consumer business group CEO Richard Yu said on Friday.

“I think it’s no problem that we become the global No.2 next year; in Q4 next year, it’s possible we become No.1,” Yu told a Huawei media briefing at its headquarters in Shenzhen.

He attributed the growth to strong sales in Europe and China, bolstered by premium products such as the P20 series, of which it has sold more than 9 million units since its launch four months ago.

The Chinese smartphone market is key for Huawei as it has come under fire in the United States, Australia and other nations over concerns it could facilitate Chinese government spying, which it has repeatedly denied.

Yu said there was nothing the company could do about being virtually shut out of the United States market with no major carriers there selling its smartphones.

But strong growth in some other markets has offset that. Huawei’s consumer business group, which includes the smartphones operations, saw 73 percent revenue growth in the Europe, Middle East and Africa (EMEA) region in the first half. Revenue from China grew 37 percent.

Yu declined to provide half-year revenue figures for Huawei’s consumer business group, but said it made a higher revenue contribution, a trend that could continue. The unit accounted for 39.3 percent of Huawei’s total revenue in 2017.

The company’s full-year forecast for smartphone shipments would represent a 31 percent rise for 2018, a strong recovery after a sharp slowdown a year ago.

Huawei’s recovery comes as the Chinese smartphone market, the world’s largest, shows signs of further consolidation towards the largest vendors.

Yu said Huawei managed to increase its global share in the premium market of above $500 smartphones in the first half to 16.4 percent from 12.8 percent a year ago. Sales of its P and mate series of premium phones grew 45 percent from a year ago.

Huawei plans to add 10,000 retail stores around the world before the end of this year. It also plans to do internal testing of 5G phones in the fourth quarter of this year for a launch some time next year, Yu said.