January 28, 2020 / 6:01 PM / 23 days ago

Huawei snatched market share from Apple, local rivals in China in 2019

SHANGHAI (Reuters) - Top Chinese smartphone maker Huawei Technologies Co Ltd thrived in 2019 at the expense of smaller Chinese rivals and Apple even as the smartphone market shrank further and consumers favoured phones with 5G technology, data shows.

FILE PHOTO: The logo of Huawei is seen in Davos, Switzerland Januar 22, 2020. REUTERS/Arnd Wiegmann/File Photo

Handset shipments for Shenzhen-based Huawei jumped 35.5% to 142 million in 2019, from 104.8 million a year earlier, according to estimates from market research firm Canalys.

Shipments for Apple's iPhones decreased about 21% year-on-year to 27.5 million. This comes as the domestic market for smartphones shrank 15% annually, according to the report bit.ly/2vm4z0T released on Tuesday.

Growth in smartphone sales stagnated in 2018 and 2019 as consumers postponed purchases, opting to wait for companies to release more 5G-enabled models. Huawei has already released four of these in China, while Xiaomi Corp has released two.

Other Chinese Android makers are racing to release 5G phones in the hope that consumers will upgrade their handsets as China rolls out its 5G network to most big cities this year.

Xiaomi’s full-year shipments fell about 21% in 2019. Rivals Oppo and Vivo dropped 17% and 19%, respectively, over the same time period.

Huawei remains at the centre of U.S.-China tensions. Last year, Washington imposed restrictions on the handset maker that barred American suppliers from selling goods and services to it, citing national security concerns. Huawei has denied these charges.

But the restrictions have had little impact on its ability to sell phones domestically. However, losing access to Google’s services had affected the company’s business overseas.

The sanctions in fact helped boost Huawei’s sales in China on the back of patriotic consumer purchases. The company’s aggressive marketing has helped as well.

Huawei’s fortunes picked up as iPhone sales lagged in 2017 and 2018, following a peak in the previous years. Last year, Apple offered discounts on iPhones to boost sales, a move that Chief Executive Officer Tim Cook later said was successful.

Canalys estimates iPhone sales fell 12% in the quarter ended Dec. 31. In the preceding quarter, sales had fallen 28%.

However, this year could be a better one for Apple, with the company expected to launch its first 5G-enabled iPhone.

According to Nicole Peng, who tracks China’s smartphone sector at Canalys, the company’s latest iPhone 11 model is the best-selling 4G device in China. Its older models are still dragging down overall sales.

Reporting by Josh Horwitz; Editing by Maju Samuel

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