Huawei’s top spot is not really due to the defeat of US sanctions. Huawei’s sales are actually down slightly from last year, but in the age of the coronavirus, sales falling only “slightly” is a major victory. Huawei’s sales are down 5% from the second quarter of last year, but Samsung’s sales have fallen and are down 30% year-over-year. Samsung’s dramatic drop was enough to give Huawei the top spot with 55.8 million, compared to Samsung’s 53.7 million.
Canalys shows smartphone sales are down almost everywhere this year, with overall shipments down 14% from Q2 2019. The only growing company is Apple, in third place, which is up 25%. Canalys attributes much of this success to the new iPhone SE, saying that “ [i]The new iPhone SE was key during the quarter, accounting for around 28% of its global volume, while the iPhone 11 remained a solid bestseller at almost 40%. “
Seeing Huawei claim the top spot for smartphones in the face of US government export restrictions comes as a surprise, but the sanctions are having an effect. Huawei is falling like a rock in the global market, with at least a 26% drop in international sales in the past three quarters. Huawei somewhat compensates for this loss with a higher market share in China. In the first quarter of 2019, Huawei’s shipments were split almost evenly between China and the global market, at 51% and 49% respectively. In the second quarter of 2020, the company sold 72% of its phones in China, according to Canalys, with just 28% of sales in the global market.
Huawei may have survived the COVID economy for now, but things will only get worse for the company in the future. Canalys warns that ” [s]strength in China alone will not be enough to support Huawei at the top once the global economy begins to recover. Thanks to the export ban, Huawei is not allowed to ship Google’s Android apps on new models, which kills Huawei’s appeal outside of China (where Google apps aren’t anyway. not available).
Huawei cannot use US chips or technologies in its products, but it has been able to stay afloat in China thanks to its internal HiSilicon chip division. However, Huawei will soon face a chip problem: TSMC, the world’s largest silicon foundry, has said it should stop Huawei from shipments after September 14. but this title, like Huawei’s success in the last quarter, cannot last forever.