Apple lost ground to Huawei, Samsung before iPhone 11 debut

Bloomberg Seoul | Updated on October 31, 2019

Apple lost ground to Samsung and Huawei in the third quarter when global smartphone sales rose on a quarterly basis only for the first time in two years, according to Canalys.

Apple shipments fell 7% to 43.5 million units in the July to September period, just before the well-received iPhone 11 hit global store shelves, the researcher estimated. Samsung Electronics, taking advantage of the lull, introduced a plethora of cheaper high-volume models to grow sales 11%, while a strong home market drove Huawei Technologies shipments 29% higher.

The global smartphone market is showing signs of life after users replaced ageing devices and demand from markets such as India surged with the proliferation of low-priced plans. On Thursday, Samsung reported a 32% jump in operating income at its mobile division, while Apples holiday-quarter outlook trumped analysts expectations. The Korean company retained global leadership while Chinese rival closed the gap, thanks to pent-up demand that built up during the previous quarter when Washington blacklisted the networking giant. Xiaomi Corp and Oppo rounded out the top five.

The prognosis for Huawei however is uncertain given the Trump Administration put it on the U.S. Entity List, which prohibits it from using the latest Android versions in new devices. Shipments to its home market surged 66% in the quarter but only rose about 18% sequentially abroad, and many analysts foresee a drop in overall international sales because of its inability to access American software and circuitry.

Huawei is not out of the woods yet, said Canalys Senior Analyst Ben Stanton. It will be a major challenge to retain its overseas volume if the Entity List saga is not resolved in the coming months.

Published on October 31, 2019

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