China telecom giant Huawei has taken over Apple’s market share in China. That’s just based on phones, which are all on Android. Wait until they roll out their own operating system for their own devices. Then Apple will need to reinvent something like the hologram phone before it ever recovers its China market.
The same may be said for Apple throughout Asia.
“At this pace, we expect Huawei to remain ahead of Apple at the end of 2019,” says Shobhit Srivastava, a research analyst for Asian business intel firm Counterpoint in Hong Kong.
Huawei is coming out with new products while Apple is just making updates to its existing iPhone. They also have a branding strategy in China which got a boost from the trade war. A Huawei smartphone is a tier 1, Made in China, “in your face, America” smartphone. That’s helped them gain additional market share in a generally saturated Chinese market.
Apple iPhone shipments declined in China for the second consecutive quarter. It is increasingly difficult for Apple to expand in China now as new China brands including Xiaomi keep coming at them.
China is a slow, and perhaps decaying market for iPhones. Plus, as Apple analysts have pointed out over the last two quarters due to disappointing sales, the Cupertino, Calif.-based company is pricing itself out of China’s market.
Huawei now has Apple beat.
It’s gaining on Samsung.
All of this is troubling for both Google and the iOS as Huawei has yet to roll out its own operating system. When it does, things will change quickly in the entire Asian smartphone market with Apple seen taking the biggest hit.
Huawei’s share in the global smartphone market reached its highest ever level at 17% during the first quarter of this year, according to a report by Counterpoint’s Market Monitor service, published on May 1.
Huawei became the second biggest smartphone brand in the first quarter with volumes up nearly 50% year-over-year.
Other Android smartphone makers are hoping to convert 5G and foldable display phones into more sales this year. Huawei is said to be making their own foldable display phone in China.
Premium features like punch hole cameras, fingerprint sensor, and some artificial intelligence capacity could stimulate growth for other players as well, including Huawei rivals. Apple has signalled that hardware is merely a vehicle for delivering an improving service experience.
Huawei is the company to beat.
Sales of smartphones rose 50% last quarter compared to a year ago, while Apple sales fell 20% globally. Samsung fell 8%. LG phones did even worse, down 40%. Other Chinese entry-level phone brands like Oppo and Vivo both saw global shipments rise by 10% and 27%, respectively. Xiaomi, seen as Huawei high-end rival in China, saw its sales volume flatlined, down 1%.
Chinese makers are winning new customers. The South Koreans and Americans are losing them in Asia.
“Chinese brands continue to defy gravity,” says Srivastava.
Top Chinese brands are now following a dual-brand strategy to cover the maximum number of price bands and to appeal to different market segments.
After entering South East Asia and India, leading Chinese smartphone brands are looking to expand in Europe. Huawei was on display recently at an event it held in France to launch its latest Android device, the P30.
“The shift in focus of Chinese original equipment manufacturers is clearly visible as Europe becomes their place of choice to launch new flagship models,” Srivastava says.