AFP/Getty Images
Further proof this week that Huawei inhabits two parallel universes, as staggering sales numbers emerged from China, even as the latest shockwaves from Trump’s blacklist reverberate elsewhere. Huawei’s headline role in the tech standoff between the U.S. and China has seemed to diminish in recent weeks—but only because TikTok has been running interference. In reality, little has changed.
Restricted internationally, Huawei continues to use China to shore up its balance sheet and keep its revenues in sensible shape. The company’s domination at home reached new heights last quarter. Its stunning 46% market share was more than its three local rivals—Vivo, Oppo and Xiaomi—managed between them. All three saw year-on-year sales plunge around 30%, while Huawei saw its own share grow 14%.
Huawei surprised many when it finally achieved its ambition to secure the world’s number-one slot for smartphone sales in April. The combination of strong sales in a Chinese market emerging from coronavirus, while other markets where rival Samsung is stronger continued to struggle, saw it top the pile. All eyes are now on imminent first-half numbers, to see if Huawei can take a surprising top spot.
Market researcher Counterpoint, which published the China numbers on July 24, also highlighted Apple’s performance. The U.S. giant saw its own sales grow sharply, up 32%, which is even more remarkable given how far the high-end Chinese market is now skewed towards 5G handsets—a market Huawei dominates with a 60% share.
Huawei has obviously needed its home market to pick up significant slack given the sales slowdown in international markets, where its blacklisted new phones ship without Google and have found it hard to secure a foothold. Google is banned in China—the U.S. blacklist makes no difference to sales. And so quarter-two China sales growth, from a 33% share last year to 46% this year, is what was needed.
This has been a bruising first half to the year for Huawei, with a damaging extension to U.S. sanctions restricting access to cutting-edge silicon used to power its flagships devices. This led to the U.K. reversing its decision to allow Huawei into its 5G network, and a renewed set of debates across the European region as other markets now run internal debates as to whether the need to do the same.
But there may be some unexpected light at the end of this tunnel, with the news this week that Huawei’s dominance of 5G patents might include a few that its rivals can’t live without in key markets where the Chinese giant finds itself excluded. Expensive license fees would be one way to soften the blow, reducing the financial impact of unplanned revenue shortfalls in countries where it had expected to win contracts.
Behind the headlines, though, there is a serious issue for Huawei in China. It had spent the best part of a decade reducing its reliance on its domestic market, and now those advances have been reversed. Reports that Huawei is cutting costs in India, given heightened border tensions with China, is just another example of a global market that is becoming significantly more difficult for the company.
The double-whammy of the latest U.S. sanctions is that it will hit both 5G equipment and smartphone sales, which account for the vast majority of Huawei’s revenues. The question now for Huawei, remains just how far it can push its dominance at home to compensate for softening sales elsewhere. That decline is impacting 5G sales as well as Google-less phones, making the task significantly harder.
The Link LonkJuly 29, 2020 at 04:21AM
https://ift.tt/39CASsM
China Sends Huawei Soaring To Dizzy New Heights - Forbes
https://ift.tt/3eIwkCL
Huawei
No comments:
Post a Comment