Huawei challenges Samsung and Apple smartphone domination

Huawei has become the first Chinese handset vendor to ship more than 100 million smartphones annually, defying a market slowdown to challenge leaders Samsung and Apple.

The Shenzhen-based company said yesterday its smartphone shipments rose 44 per cent annually to 108 million last year, thanks to strong sales in China and western Europe, as it seeks to shed its budget supplier image to target higher-margin premium models.

Huawei’s upbeat performance comes at a time when industry leaders are facing a tough year ahead. Samsung said it expected a difficult business environment this year because of weak global economy and heightened competition, while a Nikkei report said that Apple was expected to cut production of its latest iPhone models by about 30 per cent in the January-March quarter owing to mounting inventories.

Analysts said it was too early to say if Huawei could become a serious rival to Samsung and Apple as smaller Chinese players such as Xiaomi and Lenovo often swapped rank in price wars.

“In China it’s true that Huawei grew tremendously over the past six months, but it’s a bit of a dogfight within the Android ecosystem,” said Carolina Milanesi, an analyst at Kantar Worldpanel ComTech.

“Huawei’s going after Xiaomi and all the other smaller Android players.”

Huawei remains a distant third, with a smartphone market share of 7.5 per cent in the third quarter after Samsung’s 23.8 per cent and Apple’s 13.5 per cent, according to the research company IDC.

The Chinese technology company said revenue for its consumer business group, which sells products such as smartphones and tablets, jumped 70 per cent year-on-year to US$20 billion last year.

Worldwide smartphone shipments are expected to grow by 10.4 per cent in 2015, down from 27.5 per cent in the previous year, according to IDC.

In the next few years, Huawei hopes to overtake Apple and Samsung to become the world’s leading maker of smartphones in “three or four years”, a senior executive said in a newspaper interview yesterday.

Asked by Die Welt whether Huawei was satisfied in being the current No 3, its consumer devices chief Richard Yu, said: “No. We’ll move up to No 2 and then No 1 very quickly. At the end, we’ll be the world leader.”

Asked about the time frame for such an ambition, Mr Yu said: “Perhaps in three or four years.”

Samsung was the biggest rival in the immediate term, Apple in the longer term, Mr Yu said.

“We sell more devices than Samsung on the Chinese market,” he said. “But Apple is the leader in the premium segment.”

Meanwhile, Apple is expected to cut production of its latest iPhone models by about 30 per cent in the January-March quarter because of mounting inventories, the Nikkei reported, rattling the nerves of investors in the US giant’s Asian suppliers.

As inventories of the iPhone 6s and 6s Plus have piled up since they were launched in September, production will be scaled back to let dealers go through their current stock, the business daily reported.

Follow The National’s Business section on Twitter

Share This Post