Huawei Hit Causes China's Smartphone Market to 'Stumble'... Lowest Since Q2 2012

Market Share and Growth Rate of Chinese Smartphone Companies (Q2 2020 vs Q2 2021)

[Asia Economy Reporter Joselgina] China, the world's largest smartphone market, recorded its lowest sales volume in the second quarter since 2012. The sluggish performance of Huawei, a Chinese company under strong sanctions from the U.S. government, is evaluated to have affected the domestic Chinese market as well.

According to the monthly smartphone market tracker Market Pulse released by global market research firm Counterpoint on the 2nd, China's smartphone sales in the second quarter of this year totaled 75 million units, down 13% from the previous quarter. This is a 6% decrease compared to the same period last year. The market has worsened compared to last year, which was hit hard by the COVID-19 pandemic.

By manufacturer, a clear market restructuring is confirmed following the U.S. sanctions on Huawei. Huawei, which held a 32% market share just a year ago, has fallen to fifth place. Huawei's market share dropped by a whopping 22 percentage points to 10%. Instead, Vivo and Oppo led the market with shares of 23% and 21%, respectively, followed by Xiaomi (17%) and Apple (14%).

In particular, it is analyzed that overall demand for smartphones in China weakened because other companies could not immediately fill the gap left by Huawei. Counterpoint Research stated, "Huawei is still a strong brand within China, so people are not easily switching to other devices," and added, "The smartphone market is quite mature, which also contributed to the market weakness."

Xiaomi showed the largest growth in the second quarter. By increasing stores in smaller cities and accelerating offline market expansion, it recorded a high growth rate of 70% compared to the same period last year. The launch of the 11 Ultra and 11 Pro also succeeded in targeting the premium market.

Counterpoint expects that in the third quarter, Honor will gain competitiveness with a rapid recovery, intensifying competition within the Chinese smartphone market. Recently, Honor has been evaluated to show sales improvement by restoring partnerships with suppliers and securing stable procurement of components. Its market share, which was 5.1% in January, is aiming for a rebound with 8.4% recorded in June.

Meanwhile, Huawei held a new product launch event in China on the 29th of last month and unveiled the new strategic smartphone P50 series. The P50 series, Huawei's flagship strategic model, attracted attention even before its release due to the possibility of being equipped with Harmony OS, but its launch was delayed for several months due to the global semiconductor shortage and U.S. sanctions. However, due to the impact of the U.S. government's stringent sanctions, advanced semiconductor chip components could not be procured, and only 4G-only models, not 5G, were released.

This content was produced with the assistance of AI translation services.