U.S. sanctions against Huawei are really taking over now. A new report from Canalys Research shows that Huawei fell to sixth place in global phone sales in the fourth quarter of 2020, a dramatic drop from first place earlier in the year. In Canalys’ current market share table, Huawei has been banned to the “other” category.
Being stuck in “others” means that there is no clear year-on-year drop listed in Canalys data, but it does mention that Huawei sold 32 million phones in the second quarter of 2020. We can look at last year’s fourth quarter 2019 report , where Huawei sold 56 million units and posted a 42 percent year-on-year drop. All other Chinese suppliers on the Canalys chart saw big double-digit gains in place of Huawei, with Xiaomi the big winner with a 31 percent growth year on year. Huawei is now behind Apple, Samsung, Xiaomi, Oppo and Vivo.
The U.S. export ban began in May 2019, and we’re just beginning to see all the effects reaching Huawei a year and a half later. Huawei’s sales are likely to drop even further in the future. The company announced a major change in November 2020, saying it was selling its budget brand “Honor” to a third party to keep its existing supply chain alive. The buyer for Honor is listed only as “a consortium of more than 30 agents and dealers.”
Canalys market share graph. U.S. sanctions began in the second quarter of 2019.
Huawei selling Honor would be a bit like GM selling Chevy. All companies chose the same box of parts, used the same software and were basically the same devices aimed at different markets, with some modest resource adjustments. Since this was done with the aim of keeping Huawei’s existing suppliers in operation, it appears that there will still be no real difference in parts between the two companies and it is not clear how they can exist “separately”. For now, however, Huawei is banned and Honor is not, so the plan is working!
All of Huawei’s Canalys data includes the ominous asterisk that “includes sales of honor” and, from now on, probably will not include. The Honor sub-brand represented 29% of Huawei’s sales in 2019, so we are nowhere near the bottom.