The US government blacklisting of Huawei crippled its smartphone business.
Huawei executive Yu Chengdong admitted facing extreme hardship as annual phone shipments dived due to restrictions on American chip technology. The company, a leader in 5G, couldn't even produce 5G phones for itself.
According to the South China Morning Post, faced with the crippling sanctions, Yu acknowledged the immense hardship Huawei endured. The company's operations stalled, and despite being a global leader in 5G technology, they couldn't even produce 5G phones.
Despite revealing the past difficulties, Yu seems to be expressing his confidence in leading Huawei to navigate the sanctions. He went on to say that by using domestic chips instead of Western ones, Huawei smartphone users were contributing to the growth of China's electronics supply chain.
After a series of US sanctions targeting Huawei, the telecom major's global smartphone shipments fell to about 10% of those of Samsung Electronics in 2022, when it sold only less than 30 million smartphones, according to IDC. Still, Huawei mounted a comeback when it launched the Mate 60 powered by home-grown advanced chips in August 2023. In the fourth quarter of 2023 and the first quarter of 2024, Huawei smartphone shipments surpassed 10 million units for the first time since the first quarter of 2021.
According to Bloomberg Intelligence, the Chinese smartphone market is expected to see a stable recovery over the next few months, thanks to improving consumer sentiment and the next upgrade cycle around the corner. Meanwhile, the consultancy warns that Huawei's Pura 70 series, which squeezed iPhone sales, was facing consumer enthusiasm based on the Bloomberg Intelligence survey. Still, TechInsights forecasted that Huawei may see its smartphone shipments grow to over 50 million units, likely to grab a 19% market share in 2024.
Bloomberg Intelligence predicted iPhone sales in China could stabilize amid the improving consumer sentiment. Meanwhile, CNBC reports that Samsung Electronics plans to regain its market share in China with AI smartphones.
In addition to the ongoing US sanctions, Germany plans to remove Chinese telecom equipment from its 5G wireless networks over the next two to five years. A Xinhua commentary stated that the decision is unwarranted and will impede Germany's digital infrastructure development.
Source: IDC, July 2024
