Huawei All Set To Bid Adieu To Smartphone Market?

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The effects of the US ban on Huawei, along with a few other Chinese companies, have started appearing. Last week we reported about the sale of Honor – the sub-brand of Huawei which is focused on the budget smartphone market. Now, Huawei has suggested that Mate 40 will be the last smartphone from the Chinese tech behemoth in the high-end smartphone market.

With the announcement, it has become clear that Huawei’s struggle in the Smartphone market is far from over and the company sees no other promising alternate of Android OS to move ahead in the smartphone market.

In May last year, when Google announced the ban on Huawei many were sceptical about the future of the Chinese tech giant in the smartphone market. The company, however, presented a bold-faced and argued that such a ban will have minimal effect on the company’s operations. Soon, reports about the possible rollout of Huawei’s own mobile OS, a competitor of Android OS, started making rounds on the internet.

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During the early days of the ban, Dazeinfo also published a deep dive analysis on the future of Huawei (Read, The Beginning of the end of Huawei). The data-driven approach helped us to understand that despite all the efforts put by Huawei, sustaining in the smartphone market without having the backing of Google Android is like a fighting a lost battle for Huawei.

The Chinese telecom & tech major didn’t leave any stone unturned to get rid of the ban but by the end of 2019, it became clear that the Trump administration is in no mood to let go Huawei.

Huawei tried to launch its own HarmoniOS to counter Android, but the absence of Google services and Android apps kept users away from Huawei devices.

The absence of Android OS, and the popular Android apps, is not the only reason behind the struggle of Huawei. TSMC, the company which produced the Kirin chipset for Huawei, also gave up under the pressure from the US government and distanced itself from dealing with Huawei. This was another blow for Huawei in the smartphone segment as Huawei’s premium smartphones, and many budget smartphones as well, were powered with Huawei’s own Kirin Chipset. As TSMC backed off from its promise to continue with Huawei despite the ban, the end of Kirin was quite evident.

By mid-2020, Huawei had apparently accepted its fate. It hasn’t filed any new lawsuits or made any public declarations that it’s still trying to overturn the Huawei ban.

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Despite the ban, Huawei somehow managed to hold its ground in the smartphone market. According to GraphFarm, Huawei accounted for 20% share of worldwide smartphone shipments in Q2 2020. A majority of their smartphone sale, however, took place in China but the situation in other markets doesn’t seem to be as promising as it used to be. In fact, on the worldwide level too, Huawei’s growth stagnated after the ban came into the effect. By the end of Q1 2019, Huawei accounted for nearly 19% of the quarterly smartphone shipments by posting significant growth in the every passing quarter. However, after getting banned in May last year, Huawei barely strengthened its market presence as the company’s share went up from 19% to 20% in one and a half year.

Huawei smartphone share Q1 2014 - Q2 2020
Via: GraphFarm, Huawei smartphone share Q1 2014 – Q2 2020

It’s quite evident that Google’s decision to turn its back on Huawei has hit hard. The situation for Chinese tech major is becoming more worrisome as many major telecom markets, including India and Australia, have started exploring options to upgrade their telecom networks to rollout 5G without involving Huawei. The constant pressure and market struggle have apparently forced the company to consolidate its offerings and focus on business units that have been leading the growth of the company. The already crowded smartphone market doesn’t seem to be a promising bet for Huawei in the current situation especially at the time when the company has got to deal with situations at multiple fronts.

All said and done, it’s quite surprising to see the world’s second-largest smartphone vendor giving up on the tough market conditions. What’s your take on the situation, do let us know your views in the comment section below.

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