Info-tech

Huawei tightens China market hold with 42% share at expense of iPhones

Reuters Shenzhen | Updated on October 30, 2019 Published on October 30, 2019

Huawei will also double pay this month for almost all its 190,000 workers   -  AP

Huawei Technologies captured a record 42 per cent of China’s smartphone market in the third quarter as local consumers rallied behind it after US sanctions, leaving Apple to languish towards the bottom of the pile, market data showed.

Apple’s market share in China slipped to 5 per cent from 7 per cent in the year-ago quarter, according to a report that market research firm Canalys released on Wednesday, hours before Apple was to report quarterly results.

The July-September quarter marked the iPhone’s weakest sales in China in five years, said Nicole Peng, Vice-President of mobility at Canalys, with shipments likely down more than a quarter. Concerns about slowing iPhone sales in China have dogged Apple for many quarters even as the global smartphone market has slowed and a resurgent Huawei has hit record sales in the country.

With the expected roll-out of the super-fast 5G network in China in coming months, Huawei’s advantage is expected to grow further.

“Huawei is in a strong position to consolidate its dominance further amid 5G network roll-out, given its tight operator relationships in 5G network deployment, and control over key components such as local network compatible 5G chipsets,” Peng said.

“This puts significant pressure on Oppo, Vivo and Xiaomi, which find it very hard to make any breakthrough.”

Oppo, Vivo, Xiaomi and Apple together accounted for 50 per cent of the market in the third quarter, down from 64 per cent a year earlier.

Huawei said last week it had sold more than 200 million phones globally in 2019, 64 days earlier than in 2018. The company’s profits have remained resilient and revenue jumped 27 per cent in the third quarter.

The Chinese smartphone market contracted by 3 per cent in the third quarter, and Huawei smartphones made up 41.5 million of the 97.8 million shipped in the period, Canalys said.

Apple launched its latest iPhone 11 range in China in September to tepid responses on social media, but shoppers have warmed to the model’s additional cameras and cheaper pricing.

“Apple is more prepared than previous years to face strong headwinds in China,” said Canalys analyst Louis Liu, noting the iPhone 11’s camera improvements and lower launch price “were critical market stimuli

The company’s quarterly results likely received a boost from the launch and accounted for 40 per cent of its shipments, with customers willing to wait two to three weeks to receive shipments of the newer models, Peng said.

“But it faces a looming challenge, as Chinese vendors and operators are set to drive heavy marketing and promotions around 5G in the next two quarters,” Liu added. “This could steal its thunder.”

The US tech giant is expected to report flat revenue and a dip in earnings in the September quarter, based on Refinitiv data.

Published on October 30, 2019
This article is closed for comments.
Please Email the Editor