Huawei Fallout – Breakthrough New China Threats at Apple and Samsung

Huawei Fallout – Breakthrough New China Threats at Apple and Samsung
Huawei Fallout – Breakthrough New China Threats at Apple and Samsung

Europa Press via Getty Images

Without a US backtrack, a giant Huawei-shaped hole will open in the global smartphone sector over the next year, which is vital to the industry. A blacklisted shortage of chipsets is likely to cause Huawei sales to fall when current stocks run out. While this seems like an amazing opportunity for Apple and Samsung, it is in danger. China inc. is confident that Huawei’s recipe for success can be replicated and is fast moving forward.

The much smaller Xiaomi, which Huawei defeated Huawei for the first time in Europe in the second quarter of this year, was the first of the blocks to flush out and repeat Huawei’s strategy of “premium smartphones for less”.

. Xiaomi moved up to third place behind Samsung and Apple. In particular, Xiaomi recorded an increase in exports of premium devices (over EUR 300) by more than 99% compared to the previous year.

Xiaomi has positioned itself as a likely Chinese export successor to Huawei, but that will soon change. China’s Oppo is only just behind Xiaomi in terms of total global sales, but much larger in China itself. Counterpoint highlights Oppo as the other Chinese brand to watch. “Geopolitical directives and political affairs between nations affect the smartphone market in many ways. We see players like Samsung, Apple, Xiaomi and Oppo benefit the most. ”Oppo is part of BBK, which also has Vivo in its stable, and is a serious competitor to Apple and Samsung worldwide.

Back home in China, where Huawei has soared as patriotic consumers reacted to America’s blacklist, Xiaomi, Oppo and Vivo have watched Huawei’s unstoppable growth. In this second quarter Huawei has overtaken Samsung worldwide– an anomaly due to China’s market bouncing ahead of others. But Huawei secured itself a staggering 46% market share in China – and that was not an anomaly. Unsurprisingly, Samsung is now back on top in the world. According to KontrapunktSamsung secured 22% of the world market in August versus 16% from Huawei.

Analysts have suggested that – without a US backtrack –Huawei could only move 50 million smartphones in 2021. Otherwise, despite the loss of Google, the company would expect sales of 180 to 200 million units. With 76% of smartphones sold in China, domestic sales will account for a large percentage of the decline. But exports will also continue to decline. And it is these export markets that Huawei’s domestic rivals are now targeting.

Building on the growth in Europe and the already strong position in other markets, particularly India, some analysts have done so recommended Xiaomi could become a global top 3 player. But now, as reported by NikkeiOppo “is aiming for a market share of at least 5% in Europe by next year and plans to be one of the top players there over the next three years.” Oppo is supported by BBK and arguably a more serious long-term threat than Xiaomi.

Oppo tripled sales in key parts of Europe this year. “But for any smartphone manufacturer,” Alen Wu, Oppo’s global sales director, told Nikkei, “you have to have a 10-15% share of a market to be called a market leader and break even achieve … We aim to achieve this goal in the next two to three years. “Xiaomi has shown that this is possible. Ironically, Xiaomi and its BBK associate Vivo are the most likely obstacles to growth for Oppo, which is also likely to boost exports to capitalize on Huawei’s likely decline. While both phone companies have to work on brand awareness outside of Asia, they have grown rapidly and now have a high profile in global sales.

Huawei was uniquely positioned to take on Apple and Samsung, and ultimately targeted that first place. Realistically, his moratorium has leveled the playing field for the others. There may be some brand loyalty for Xiaomi in Europe, but nothing compared to the stickiness Huawei has built. The recent rapid growth suggests recent conversions that are likely to be converted again. All of this will be evident to Oppo, Vivo and BBK, who also have the OnePlus and RealMe brands and pose a real threat to the larger global smartphone manufacturers.

Conversely, Apple and Samsung clearly enjoy strong customer loyalty. However, Huawei has shown that it can be used successfully. When Huawei slumped Samsung for the second quarter, despite strong sales in China, Canalys pointed out that it was “the first quarter in nine years that any company other than Samsung or Apple has led the market.”

What about Huawei? As I reported earlier, the company has adjusted its strategy and focused on its software ecosystem to prepare for a smartphone chipset shortage. For the new strategy to be successful, other manufacturers, likely Chinese, will have to use it as an alternative to Android. This will work fine in China but will be a drag in Europe and elsewhere. It’s hard to understand why an OEM with the ability to target European consumers would do anything to make this job difficult or to help a rival.

The scaling option for Oppo and Vivo opened up directly due to the limitations of Huawei’s blacklist. Huawei was able to overtake Apple and target Samsung. Now we have several Chinese brands trying to replicate the recipe and do the same thing. It is clear that these Chinese brands will compete with each other for market share, with Huawei staying in the picture, albeit less. For Apple and Samsung, however, the net bottom line revolves around an increasingly competitive market driven by exports from Chinese manufacturers that can transform the industry’s economy.

Reports this week that Huawei could sell its Honor brand to exempt it from US sanctions perfectly illustrate the scale of the changes we could see now. Additionally, there is the minor touch of a US election. One cannot help but conclude that the relative silence of Huawei and China is waiting for the outcome and an assessment of the possible changes. In the meantime, BBK has become the Chinese smartphone giant most likely to take its crown – although its brands apparently publicly distance themselves from the parent company (all private companies) and really do compete.

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