When the former Trump administration announced the sanctions against Huawei in 2019, one of the main consequences was that the manufacturer was no longer able to access Google’s license which allows essential apps like Play to be preinstalled. Store, Gmail, Google Maps or even YouTube. And since these apps are not used in China, it has not affected sales of Huawei smartphones in the Middle Kingdom.
In Europe, although sales of Huawei smartphones have been affected by these sanctions, the manufacturer has continued to offer models using the open source version of Android, and on which Google’s services are replaced by alternatives. Huawei has even developed a search engine to find .apk files (to install apps that are not in its App Gallery store), as well as a Google Maps competitor called Petal Maps based on TomTom technologies.
But in 2020, new sanctions fell, directly targeting the manufacturer’s supply chain. Indeed, these new measures taken by Washington mean that non-American suppliers to Huawei, but which use American technologies or equipment, must apply for a permit in order to trade with the manufacturer.
Consequences of a drop in the production and sale of the Honor brand, which was specialized in the mid-range
As a result, Huawei is struggling to source components for its smartphones. And at the start of 2021, the consequences of these new measures are starting to be visible.
In a recently published report, the company Counterpoint Research mentions the decline of Huawei in China, due to a drop in production, and because of the sale of the Huawei brand. “Huawei and HONOR have consistently lost their share of the Chinese market due to component shortages following US sanctions and fewer new launches. Its inventory of key components is running out and it will not be able to source 5G smartphone components ”, can we read in the publication.
“To make the most of its shrinking component inventory, Huawei has focused more on the high-end segment, only selling products with higher margins. This again left a void in the mid-segment of the market. Due to the insufficient supply, distributors in China are also reducing their Huawei activities and turning to other brands ”, also indicates Counterpoint.
And while Huawei is losing ground in China, the Oppo brand is gaining ground. This is also highlighted in the publication of the company Counterpoint which indicates that for the first time, in January 2021, Oppo was the number of the smartphone market in the Middle Kingdom.
Meanwhile, Oppo and Xiaomi are gaining ground
During the month of January, Oppo’s market share would have been 21%. This brand is followed by Vivo, with a 20% share, followed by Huawei, Apple and Xiaomi. It should also be noted that in Europe, it is Xiaomi who seems to benefit from the decline of Huawei. In France, Xiaomi even managed to become number 2 behind Samsung in the summer of 2020.
It should also be noted that while many manufacturers have been heavily impacted by the Covid-19 pandemic, Xiaomi has performed fairly well in 2020. And currently, rumors suggest that this year, the manufacturer could switch to the higher speed (in terms of production) in order to become the world number 2.
And unfortunately, although the Trump administration, which implemented these sanctions, has been replaced by the Biden administration, there may not be any positive developments regarding Huawei’s situation.