HONG KONG (Reuters) – China's Huawei Technologies cemented its dominance of the domestic smartphone market in the second quarter, with shipments and market shares rising as Chinese customers supported the embraced firm in the midst of its trade battle with the United States.
FILE PHOTO: A Huawei logo is seen on a mobile phone screen in their store in Vina del Mar, Chile on July 18, 2019. REUTERS / Rodrigo Garrido / File Photo
Huawei, which has been on a US blacklist since the middle of May and were almost prevented from doing business there even before, sent 37.3 million smartphones in China during the three months ended June, up 31% year-on-year, according to market research firm Canalys.
Market share rose more than 10 percentage points to 38% in the quarter, even as all other top vendors lost ground in the world's largest smartphone market, Canalys data showed.
Huawei was added by Washington to a so-called Entity List in May. The blacklist has threatened to cut access to key US components and software such as the Google Android apps.
The addition to the list "caused uncertainty abroad," but the company has shifted its focus to its domestic market, investing in aggressive offline expansion to entice consumers with a patriotic sales pitch, said Canalys analyst Mo Jia.
Conversations about supporting Huawei have regularly appeared on Chinese social media on comment threads that have news about the company.
Kitty Fok, who tracks China's smartphone sector at research firm IDC, said consumers were responding to the splash of Huawei with pro-China sentiment, which helped increase the brand's already strong appeal in the country.
“The product itself is already recognized, and the trade war helped people feel that they needed to support Huawei. The only concern was that they might not get the component supply, but in the end they did, ”Fok said.
Huawi's smartphone shipments for the second quarter increased even as overall Chinese smartphone shipments shrank. Smartphone shipments in China fell by 6% in the quarter to 97.6 million units, the 9th consecutive quarterly decline, according to Canalys.
Oppo, Vivo, Xiaomi Corp ( 1810.HK ) and Apple Inc ( AAPL.O ), the top four suppliers behind Huawei, saw drop in shipments and market share in the quarter , said Canalys.
China shipments in the second quarter represented 64% of Huawi's total smartphone shipments in the quarter, it said.
"It is clear that the international market is a risky market now, while in China, where the Android ecosystem is most mature, in terms of sales channels and software revenue, Huawei has a clear advantage in price negotiations," said Canalys analyst Jia.
Reporting by Sijia Jiang in Hong Kong; Further reporting by Josh Horwitz in Shanghai; Editing by Muralikumar Anantharaman