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The Q2 sales data has made Huawei the leading phone maker in the world as international sales are affected by the coronavirus pandemic.
It’s a widely known fact that the coronavirus pandemic has resulted in a drop in international trade. As a result, the Chinese phone maker Huawei Technologies Co. Ltd (SHE: 002502) now leads other prominent phone manufacturers. Huawei has overtaken Samsung Electronics Co Ltd (KRX: 005930) and Apple Inc (NASDAQ: AAPL) in sales with the volumes recorded at 55.8 million smartphones.
The Q2 sales data has effectively made Huawei the leading phone maker. This is mainly due to the tanking of international sales that has given the Chinese manufacturer an edge through domestic sales. The records from research firm Canalys shows that the bulk of orders fulfilled by the company in Q2 of 2020 were of local origin. This is 70% of the sales recorded in the period. The report shows that the company’s international order dropped drastically within the period.
Huawei and Samsung Competition
Meanwhile, the second-placed shipper of smartphones in this quarter is Samsung. The company sold 53.7 million phones which is a 30% drop when compared with last year’s performance.
The competitive smartphone market has seen Huawei desire the top spot for several years. An accomplishment it has realized in this quarter. In April, the smartphone market dropped by 27% in comparison with last year’s sales.
Europe which has been a major market for Huawei has been hard hit by lockdowns like other regions. The company’s market share fell 16% in Q2 in the region. This is lower than the 22% market loss of 2019 in Europe.
Expansion of Huawei Share in Chinese Market
The recent dominance of Huawei has been shown to the direct effect of its expansion program in the Chinese market. Data available from Counterpoint Research shows that Huawei, which has been the third-largest phone maker trailing Samsung and Apple in Europe has continued to expand and strengthen its market in China.
Mao Jio from Canalys said:
“It will be hard for Huawei to maintain its lead in the long term.”
Companies in China have traditionally leveraged the county’s population to become big players on the global stage.
It’s obvious however that the local market is not enough to sustain the lead. Even the company’s partners are wary, according to Jio, “its major channel partners in key regions, such as Europe, are increasingly wary of ranging Huawei devices, taking on fewer models, and bringing in new brands to reduce risk.”
Huawei still faces opposition in the U.S. which placed restrictions on its services, effectively blocking its access to Google LLC (NASDAQ: GOOG) (NASDAQ: GOOGL) products such as Google Android. Google services are restricted in China anyway so the effects may not be felt locally. However, in the global scene, phone makers with access to these still have an edge.