SHENZHEN, China (Reuters) – Huawei Technologies lifted its share of China’s smartphone market to a record 42%, with third-quarter shipments rising by two-thirds as domestic consumers rallied behind it after U.S. sanctions, data released on Wednesday showed.
FILE PHOTO: A Huawei company logo is pictured at the Shenzhen International Airport in Shenzhen, Guangdong province, China July 22, 2019. REUTERS/Aly Song
Huawei strengthened its dominance of the world’s biggest smartphone market even as the Chinese company was all but banned by the United States in May from doing business with American companies, significantly disrupting its ability to source key parts.
The world’s No. 2 maker of smartphones was granted a reprieve until November. Nevertheless, promotions and patriotic purchases have driven Huawei’s smartphone sales in China, helping it more than offset a shipments slump in the global market.
While the Chinese smartphone market still contracted by 3% in the third quarter compared to a year earlier, Huawei smartphones made up 41.5 million of the 97.8 million shipped in the period, according to data from market research firm Canalys.
“Huawei opened a huge gap between itself and other vendors,” said Nicole Peng, Canalys vice president of mobility. “Its dominant position gives Huawei a lot of power to negotiate with the supply chain and to increase its wallet share within channel partners.”
The third quarter sales also mark Apple’s weakest quarter in China for five years, said Peng.
However, she added that Apple received a boost from the launch of the iPhone 11 in September, with customers willing to wait two to three weeks to receive shipments of the newer models.
Huawei said last week it had sold more than 200 million phones globally in 2019, 64 days earlier than in 2018.
The company’s profits remain resilient despite pressure from the United States, with revenue jumping 27% in the third quarter.
Its flagship Mate 30 Pro 4G version, which Huawei unveiled in September, was not a big factor in its Q3 success, Canalys said, with most people waiting for the 5G version to launch later this year.
“Huawei is in a strong position to consolidate its dominance further amid 5G network rollout, given its tight operator relationships in 5G network deployment, and control over key components such as local network compatible 5G chipsets compared with local peers,” said Canalys’ Peng.
“This puts significant pressure on Oppo, Vivo and Xiaomi, which find it very hard to make any breakthrough.”
Reporting by David Kirton; Editing by Muralikumar Anantharaman