Huawei’s Rapid Rise to Third Place in the Smartphone Race
Huawei has quickly grown to become one of the world’s biggest telecommunications companies since its inception in 1987, owning huge swathes of network infrastructure across different countries. It looks as if its smartphone sales are really beginning to take hold too – results this year have been great for the Chinese manufacturer, with an increase in global smartphone sales of 39% in the first half of 2015.
Now a new report from Strategy Analytics now states that Huawei has risen to take the title of the third-largest smartphone manufacturer globally in terms of number of units shipped, pipping Microsoft to the post by 0.6%. This comes after a general decline in mobile phone sales in China for other manufacturers like Xiaomi and Samsung, and a global market increase of only 2% year-on-year. This is an impressive feat given the current saturation of smartphones across the world, and when you consider that most of the competing companies have strong footholds and brand loyalty across multiple locations.
The report itself claims that “Huawei shipped 30.6 million mobile phones and captured a record 7 percent marketshare worldwide in Q2 2015″. As stated, this puts it behind only Samsung and Apple in the global numbers scheme, who shipped 89 million and 47.5 million smartphones each, garnering them 20% and 11% marketshare respectively. That means that there is an amazing 4% difference between the number of handsets that Apple and Huawei have shipped this year, although it must be noted that Huawei has released a number of phones already, with Apple having to rely on 2014’s iPhone 6 & 6+ to provide sales until its new models are announced this fall.
This might come as a bit of a surprise to many readers, as Huawei doesn’t have as strong a brand in the US and Europe as it does in China and the East. There is still mistrust of Chinese brands in the US, especially evident in Huawei’s near constant scrutiny from security operatives, with a fear of political and industrial espionage or just poor quality merchandise still present, regardless of reports to the contrary. There’s a distinct lack of advertising presence in the West, which can go a long way to securing sales in a country where many consumers know of only two or three options when it comes to their next 24 month contract.
There’s no doubt that Huawei has done very well over the last year in order to gain this lofty position, and given the calibre of the handsets that it has released, this attention is deserved. However, there are a few caveats worth keeping in mind when looking at the above report. Firstly, the ‘Microsoft’ referenced in the statistics includes all Nokia device sales (ignoring the N1 obviously), which of course includes the Lumia range, and not all analyses takes this into account, as Nokia will begin releasing non-Microsoft phones under their own name once their contract ends in 2016. Additionally, the Windows Phone line is far from dead, and is set to receive a boost in sales once Windows 10 is released for mobiles later this year, potentially alongside refreshed models.
Also, Lenovo is nowhere to be seen in this report, and this is presumably due to the fact that its numbers are treated separately to Motorola’s, which it owns. Other data, like that in this report from IDC from earlier this year, combines the sales of these companies to show that Huawei’s position is not so secure. Lenovo are also a huge presence in China, and their comfortable position in the laptop field helps spread the brand name around, building trust amongst business users. With their acquisition of Motorola Mobility, Lenovo have achieved instant access to American and European markets too, something that Huawei will be envious of, especially once the newly announced Moto G and X’s begin to ship.
Premium Smartphones, Low Prices
Nevertheless, things are clearly changing for Huawei, and it is easy to see why. The main alteration in the smartphone manufacturer’s strategy recently is an increased focus in high-quality flagship devices, not only in its main Huawei name, but also in its sub-brand Honor. According to Huawei itself, shipments for mid-to-high-end devices have jumped up by 70% year-on-year so far, but external quantitative evidence for this is difficult to find. It is clear however, that flagship-quality devices are featured more in the product catalogue than ever before, with recent devices like the P8 representing the relative pinnacle of the Chinese smartphone maker’s design, and a compelling alternative to many more recognizable models.
This trend is set to continue with the upcoming Mate 8, expected to be announced within 2 months. Current specifications include a 6″ 2K display, 4GB RAM, an in-house Kirin 950 octo-core CPU, fingerprint recognition, and 20MP and 8MP cameras. Previous devices like the Ascend P8/Lite, P7, and Mate 7 have generally gained positive reviews, with build-quality having improved hugely recently, one of the main considerations for consumers when spending their money. Many of the global versions of these devices are bootloader unlockable through the proprietary website and have their kernel sources released, both of which are useful for the XDA community, but unfortunately the US Qualcomm-driven units can be more difficult to modify.
Cost is an important factor here too; Huawei joins the multitude of other Chinese manufacturers selling well-specced devices at relatively low prices. Its flagships tend to fall in the middle of the pack in this respect, where others like OnePlus and Elephone can really push the price down and provide impressive deals, Huawei sits with Xiaomi, Meizu and Oppo taking up the middle range. This is no bad thing, as it displays an element of craftsmanship and care for the products on offer, whilst still undercutting rivals from the US and Korea.
Smartphones released under the Honor moniker have aided Huawei’s cause too. If you’re not as familiar with this off-shoot, we recently hosted an interview to try to clear up and confusion around the name. Honor’s recent devices include the 6 and 6+ flagships, along with more budget friendly offerings like the 4X, and all have been well-received on the whole, despite being considered a little derivative. Whether the brand was created to try to detract attention away from its Chinese brother or not, it is capable of producing some well-equipped phones, at similarly reasonable prices, with a particular slant towards Western market-penetration, which is an essential factor.
It’s also essentially confirmed that Huawei will be making one of this year’s Nexus phones too. They have a slight disadvantage when compared to LG, having been given the plus-sized 5.7″ display model to design. There’s a good reason for this of course; in the past, manufacturers have been given the luxury of using one of their own flagships as a physical base to build upon, and the Mate 8 should create an excellent foundation. Google are aware that Huawei can build large phones that handle well, and after the Nexus 6, that’s something that is more important than ever. The upcoming Nexus phablet is rumored to contain some 9 Comments, and combined with almost exclusive access to vanilla Android M, the Chinese manufacturer should be in control of a very tempting device, and will expect a marked increase in sales as a result.
The smartphone market is still one of the most rapidly progressing in the world, and remains as competitive as ever, especially with this year’s renewed focus on bang-for-buck handsets. Close competitors Xiaomi will have a lot riding on their upcoming Mi 5, and LG will be hoping that their more easily-pocketable Nexus will prove to be successful too. Younger companies like OnePlus continue to try to break the mould and hype their low-cost/high performance options, and all of the above are snapping at Huawei’s heels in the eternal race for domination. Let’s not forget that Huawei has been here before too, with numbers from 2013 showing them holding a similar position, which faded quickly over the proceeding year.
Huawei should be proud of what it’s achieved so far, but it will be fully aware of how quickly these things can change in such a cut-throat marketplace. It will be very interesting to look back upon this data in the future with the benefit of hind-sight, but right now the Chinese telecoms giant look like a fairly safe bet. For a deeper look into what enabled it to get as far as it has, check out this prescient post we published back in March, which dives further into the details of what makes the huge company tick.