Huawei, once a global smartphone powerhouse, faced significant challenges in the wake of U.S. sanctions that restricted its access to key technologies. These sanctions disrupted its supply chain, particularly semiconductors and 5G-related components, causing a decline in its market share. However, Huawei’s recent release of the Mate 60 Pro, featuring advanced chip technology and 5G connectivity, has sparked a remarkable turnaround in its fortunes.
As a result, Huawei has emerged as the fastest-growing smartphone maker in China, achieving 37% year-on-year growth in sales in the third quarter of 2023, as reported by Counterpoint Research. This resurgence positions Huawei for a potential return to the top five smartphone makers in China.
Huawei’s Remarkable Growth
According to the latest report from Counterpoint Research, Huawei has been reinvigorated in the Chinese smartphone market. Sales of Huawei smartphones in China grew by an impressive 37% year-on-year in the third quarter. The company secured a 12.9% market share during this period, a substantial increase from the 9.1% market share it held in the same quarter the previous year.
This resurgence is significant, given Huawei’s prior challenges in the wake of U.S. sanctions that cut off access to critical technologies and components. These sanctions, which began in 2019, primarily affected the semiconductor supply chain, causing Huawei’s smartphones to lose their appeal among consumers.
The Game-Changer: Mate 60 Pro
In a surprising turn of events, Huawei’s fortunes took a positive shift in September with the release of the Mate 60 Pro, a smartphone equipped with a groundbreaking 7-nanometer chip and 5G connectivity. The noteworthy aspect is that the U.S. sanctions had been specifically designed to hinder Huawei’s access to such cutting-edge technology.
This innovative device captured the imagination of Chinese consumers, resulting in 1.6 million units sold in the first six weeks following its release, according to Counterpoint Research. Ivan Lam, Senior Analyst at Counterpoint Research, emphasized the significant impact of the Mate 60 Pro on Huawei’s resurgence. He stated, “It has made a huge splash in the market, contributing significantly to Huawei’s smartphone sales growth in the third quarter.”
Challenges for Competitors and Implications
Huawei’s resurgence poses challenges to its competitors in the Chinese smartphone market. The company had previously been Apple’s primary challenger in the high-end smartphone segment in China. Huawei’s return could potentially create new challenges for Apple in this market.
Furthermore, analysts believe that if Huawei decides to incorporate its advanced Kirin chipset into its mid-to-lower-end smartphone portfolio, it could disrupt the competitive landscape and potentially propel the company back into the top five smartphone makers by market share. As suggested by Lucas Zhong, Research Analyst at Canalys, in the firm’s report on China’s smartphone market, the introduction of the new Kirin chipset across a broader range of products could lead to significant market share shifts among leading vendors.
The Broader Smartphone Market in China
China’s smartphone market experienced a 14% year-on-year decline in shipments in 2022, as a result of persistent Covid-19 pandemic restrictions and weakened consumer spending. The strict control measures related to the pandemic impacted consumer purchasing behavior.
In the third quarter of 2023, smartphone shipments in China decreased by 5% year on year. However, this decline suggests that the worst may be over, and there is an expectation of gradual demand recovery. Canalys, in its report on the Chinese smartphone market, noted that the market has potentially bottomed out in 2023. It anticipates an encouraging trend of gradual demand recovery, reflecting renewed optimism in the smartphone market.
Huawei’s Resurgence – A Game Changer in the Smartphone Market
Huawei’s remarkable resurgence in the Chinese smartphone market is a testament to the company’s determination and innovation. The release of the Mate 60 Pro, equipped with cutting-edge technology that was previously restricted by U.S. sanctions, has reignited Huawei’s growth and market share. This success not only presents challenges to competitors but also holds the potential for Huawei to regain its prominent position among the top smartphone makers in China.
As the market continues to recover, the spotlight is on Huawei’s future strategies, including the potential expansion of its innovative Kirin chipset to a wider range of products. Huawei’s journey highlights the dynamic nature of the smartphone industry, where resilience and groundbreaking technology can reshape the competitive landscape and influence the future of the smartphone market.