The US sanctions against Huawei are now really starting to hold. A new report from Canalys Research shows that Huawei dropped to sixth in global phone sales in the fourth quarter of 2020, a dramatic drop from its first place earlier this year. In Canalys’ current market share table, Huawei has been relegated to the “other” category.
Being stuck in “other” means there’s no apparent year-over-year decline in Canalys’ data, but it does mention that Huawei sold 32 million phones in Q2 2020. We can look at Q4’s report. 2019 last year, where Huawei sold 56 million. units, and come with a year-over-year decline of 42 percent. Every other Chinese supplier in Canalys’ chart saw big double-digit gains instead of Huawei, with Xiaomi taking the big winner with a 31 percent year-over-year growth. Huawei is now behind Apple, Samsung, Xiaomi, Oppo and Vivo.
The US export ban started all the way back in May 2019, and we don’t start to see the full effects of Huawei until a year and a half later. Huawei’s sales are likely to drop even further in the future. The company announced a major change in November 2020, saying it was selling its budget brand ‘Honor’ to a third party to keep its existing supply chain alive. The buyer for Honor is only listed as “a consortium of more than 30 agents and dealers”.
Huawei selling Honor is a bit like GM selling Chevy. The companies all chose from the same parts bin, used the same software, and were basically the same devices targeting different markets, with a few modest feature tweaks. Since this was done with a view to preserving Huawei’s existing suppliers, it sounds like there will still be no real differences in parts between the two companies, and it’s not clear how they can exist “separately”. However, for now Huawei is banned and Honor is not, so the plan is working!
Canalys’ Huawei data all carries the ominous asterisk that it includes “Honor Selling”, and likely not in the future. The Honor sub-brand accounted for 29 percent of Huawei’s 2019 sales, so we’re still a long way from bottoming out.