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Money Huawei: Smartphone sales slumped by another 20 percent - no end in sight

17:47  30 november  2020
17:47  30 november  2020 Source:   t3n.de

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Huawei is having a tough year, after it was deemed a threat to national security by the US, and placed on the Commerce Department's entity list. Huawei chief Ren Zhengfei estimated that the ban would cost the company billion over two years, and even the positive sales figures released today were

The latest report into blacklisted Huawei 's likely smartphone sales drop claims international sales could slump as much as 60% in 2019, with the latest Honor 20 device a potential casualty.

Huawei's smartphone sales decline for the third quarter in a row. However, analysts believe that the bottom is still a long way off.

Huawei Mate 40 Pro. © t3n Huawei Mate 40 Pro.

The Chinese technology group Huawei continues to suffer from the massive US sanctions , which effectively make it impossible for the group to buy US products or products made with US technologies. The company is particularly hard hit by the ban on integrating Google services on its smartphones.

Huawei: Abandonment of chip manufacturers and Google license makes business difficult

Although the services in China do not play a role anyway, which is why the decline there is somewhat smaller. In the rest of the world, especially in the western nations, a smartphone can hardly be sold without Google services. The manufacturer had recently countered the problem by moderately improving the older models that still had a Google license.

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Huawei has admitted its smartphone sales have slumped by 40 per cent and the company is to slash production in the wake of US threats of blacklisting. Founder and CEO Ren Zhengfei announced at headquarters in Shenzhen that the Chinese telecoms giant's overseas smartphone sales had

Huawei sold 118 million smartphones in the first half of the year — 59 million in each quarter — representing a 24 percent year-on-year increase The figures come as Canalys issues a report today detailing Huawei ’s increasing dominance of the Chinese smartphone market over the past quarter.

The market research company Gartner, which publishes a quarterly report on global smartphone market shares , sees this strategy as almost exhausted and therefore predicts a further accelerating decline in sales for the coming year. That should at least apply as long as the sanctions are not significantly eased. As Gartner found in its latest report, smartphone sales to end customers have fallen globally by 5.7 percent to around 367 million units. In the two previous quarters, the decline had always been around 20 percent. Gartner wants to see the first signs of recovery in this.

This does not apply to Huawei, however. Although the manufacturer had brought slightly more devices on the market than in the previous quarter, its market share fell by a further 20 percent to around 52 million units sold. That is 14 million units less than in the previous quarter. The corona crisis, which almost paralyzed the demand for smartphones, is only the icing on the cake for Huawei's crisis. In particular, the termination of the business relationship with the world's largest chip contract manufacturer TSMC and the backup provider Samsung has resulted in Huawei no longer receiving the core of its devices, the SoC (System-on-a-Chip) in sufficient quantities can. Although Huawei develops its own chips through its subsidiary Hisilicon, it works “fabless”, ie without its own production. The U.S. sanctions now prohibit manufacturers from using American technology to produce goods that will be shipped to Huawei. Chip production for the Chinese smartphone giant is therefore idle.

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The company's domestic smartphone shipments increased 66 percent year-over-year, according to a report by market research firm Canalys. Huawei 's growth in China will likely continue. "Its dominant position gives Huawei a lot of power to negotiate with the supply chain and to increase its wallet share

The Huawei fallout widens souring sentiment across the globe. investment-grade benchmark widened marginally at the end of Europe’s day“These problems are minor from a credit perspective,” Juan Valencia, a credit strategist at Societe Generale said in emailed comments.

Gartner apparently does not see the upcoming change in the US presidency as a turning point for relations with Huawei. Rather, analyst Anshul Gupta assumes that Huawei's sales will collapse to around a fifth of the usual volume next year. Huawei could possibly stay afloat for another quarter with sales of older, but slightly upgraded models. In the coming year at the latest, however, this strategy would no longer work - the speed of innovation on the smartphone market is too high.

The sales ranking based on Gartner figures for the third quarter of 2020. (Image: Gartner)

Competitors hunt for Huawei market shares

In addition, Chinese competitors are now openly chasing Huawei's market share. Companies like Oppo or Xiaomi are throwing new models on the market in quick succession, which are poaching in Huawei's price segments. In order to accelerate the enticement of customers, the manufacturers sometimes prefer the introduction of new models. According to rumors, Xiaomi wants to present its Mi-11 series in December. In rotation, this would not have been expected until February next year. Samsung is also said to want to present its S-21 series

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No other aggregator does Huawei Smartphones news better. Huawei Mate 40 smartphone range could be ‘last hurrah’ in Europe for Chinese firm Engineering and Technology Magazine12:11 23-Oct- 20 .

Samsung slump makes Huawei the world's biggest smartphone brand for the first time, report says. For Samsung, a sharp rise in smartphone sales will drive a rebound in earnings for the third quarter and the boost will likely carry over to next year, SK Kim, an analyst at brokerage firm Daiwa

much earlier than usual.

Xiaomi and Samsung already above previous year's level Xiaomi

overall is one of the beneficiaries of the Huawei crisis. After a strong business quarter, the Gartner figures also show that the company was able to achieve a sales increase of around 35 percent compared to the same quarter of the previous year with around 44 million units. According to Gartner, the positioning of the focus on the range under 300 euros should also play an important role. Consumers are evidently leaning towards cheaper rather than premium smartphones. Xiaomi was able to overtake Apple in the past quarter and claim third place in the sales ranking.

This could also explain Apple's decline in sales by 0.6 percent to around 40 million units. However, this would fail to recognize that Apple was only able to start its new iPhone 12 line with a delay due to the pandemic, so that this is not a general trend. Sales were probably only postponed to the following quarter.

sales leader Samsung in turn benefits from diversifying more strongly in the low-price segment. In an overall difficult environment, the South Korean manufacturer succeeded in surpassing the previous year's result by 2.2 percent with around 81 million units sold in the third quarter of 2020. Gartner attributes this success to the expansion of the range of smartphones in the A series and the newly launched

S20 FE (Fan Edition)

, a cheaper version of this year's flagship.

75 percent of the smartphones sold are 5G-capable. According to Gartner, this is at least true in the Chinese market. In the USA and Europe, the proportion is already 45 percent. Gartner expects, however, that 5G, as a mandatory feature of a smartphone, will only become established globally in a few years.

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