U.S. trade bans against Huawei are having a very tangible effect on the company’s sales at home. Counterpoint Research now estimates that Huawei’s market share in China fell to 16 percent in January 2021. To put it in context, the technology giant had a 41 percent share in the first quarter of 2020. Even though the metrics are not completely comparable (and Counterpoint is shy in numbers), there was clearly a sharp drop.
Huawei’s decision to sell the Honor brand played a role, but Counterpoint attributed the decline in large part to U.S. restrictions. With components like 5G processors and modems missing, Huawei is focusing on low-volume premium phones like the Mate 40 Pro to make the most of its limited stock.
The fall from grace has already changed the dynamics of the Chinese market. Oppo became the country’s leading brand for the first time in January, with a 21 percent share, while its sister brand Vivo was not far behind with 20 percent. Huawei was tied for participation with Apple and Xiaomi with 16% each.
The future does not look bright for Huawei. Analysts expect its decline to continue throughout 2021. Competition is also not at a standstill. Oppo is about to launch its flagship Find X3 phones on March 11, and has been gaining sales of more affordable handsets with the Reno 5 and A series. Xiaomi, meanwhile, recently launched the Mi 11. Although Honor can continue the spirit of Huawei’s work, it’s clear that Huawei itself faces bleak prospects in the coming months.