In 2019, the US put Huawei in the list of entities. Why? The Trump administration considered Huawei a threat to U.S. national security because of its alleged links to the Chinese communist government. Some also noted that Huawei had recently outgrown Apple is the second largest smartphone maker in the world and wonders if this has anything to do with U.S. action. Some may argue that somehow putting Huawei on the list of entities may have backfired, since it banned the company from its supply chain in the United States and those companies had made $ 18 billion with Huawei in the year. previous.
Huawei has been replaced as the leading smartphone brand in China
The Trump administration may have thought it had sunk Huawei’s Battleship, forcing it to replace Google’s licensed version of Android with the open source version. But at the beginning of last year, Huawei had taken first place soon to become the world’s largest smartphone maker for a month. This forced the Trump administration to take the next step. The Commerce Department has tightened an export rule that now prevents smelters from delivering cutting edge chips made with American technology to Huawei without a license.
For the first time, Oppo is the leading smartphone brand in China
Announced exactly a year ago as the listing of entities, this was the last straw that broke the camel’s back. This prevented Huawei, at the time the second largest customer from TSMC’s foundry contract (behind Apple), from receiving the chips that power its main phones. And TSMC had just started producing Huawei’s most technologically advanced 5 nm chip, the Kirin 9000; this component was reserved for the Huawei folding phone sequence, along with the latest versions of its flagship handsets. Where the listing of entities may have failed, the ban on sending chips was a grand slam with respect to the Trump administration. The move forced Huawei to sell its Honor sub-branded for $ 15 billion, an astute move by the Chinese manufacturer since taking Honor out of Huawei’s orbit and preventing U.S. restrictions from affecting it.
Counterpoint estimates that Oppo held 21% of the Chinese smartphone market in January, with Vivo’s 20% share in second place. Huawei, Apple and Xiaomi are at an impasse with 16%. Varun Mishra, a senior analyst at Counterpoint Research, explained how Oppo reached the top in China. “Oppo was able to successfully reposition its product lines in 2020,” said Mishra. “The rebranding of the Reno series and the launch of a more capable device at a lower price than its predecessor helped Oppo to capture the affordable premium segment. The strong momentum of the A series in the middle segment strengthened Oppo’s product portfolio and it was able to meet 5G demand in China over a wide price range. This was helped even more by Huawei’s decline. “
The scary part for Huawei is that the U.S. ban will soon leave it out of stock of 5G components. Considering that more than 65% of devices sold in China during the fourth quarter of 2020 support 5G, Huawei faces serious problems ahead. The company has been trying to maintain an optimistic outlook and its HarmonyOS will make its smartphone debut on the Mate X2. But the real climate within the company can be described as bleak, at least for now. Tom Purdy, director of security for Huawei USA, said: “It has been a very difficult fight. But we are taking a long-term approach and it is helping us to prioritize which products are most important, which components we have.” Purdy says that Huawei would like to eventually be able to work with Google again. And in that regard, it will be up to President Joe Biden to remove restrictions on Huawei.
