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Six consecutive quarters. That’s how long thesmartphonemarket has been in decline so far. And market leaders like Apple and Samsung are really feeling the pain. But not Huawei.Richard Yu, CEO of Huawei’s consumer business group at the P30 Pro launch event. Credit: Eric Piermont/AFP/Getty ImagesOn a tear in China but also coming on strong in Europe, Huawei saw 50 percent growth in smartphone sales in Q1 year over year, while Apple plummeted 30 percent, according toIDC. Samsung didn’t struggle as much, but shipments were still down 8 percent, and that was before theGalaxy Fold debacle.
The scary part? Huawei phones aren’t even sold officially in the U.S. This is largely due to security concerns andreported links between Huawei and the Chinese government. Huawei has denied those claims and issuing the U.S. government. And yet Huawei is thriving anyway.
“Huawei doesn’t necessarily need to have a position in the U.S.,” said Peter Richardson of Counterpoint Research. “Working with the U.S. carriers can be expensive due to the need for extensive testing and then marketing support.”
Huawei on a roll
Despite the political controversy, Huawei has been one of the most innovative smartphone makers over the past few years. For example, in 2016, theHuawei P9was the first phone co-engineered with Leica with a dual-lens shooter. TheHuawei Mate 10in 2017 was the first phone with an embedded AI chip. And last year’sHuawei Mate 20 Prowas the world’s first phone to offer reverse wireless charging (way before theGalaxy S10).
The Huawei Mate 20 Pro was the first phone to offer wireless reverse charging. Credit: Tom’s GuideFor its most recentHuawei P30 Pro, the company literally reinvented the smartphone camera, delivering not only a 5x periscope zoom but a super spectrum sensor that delivers incredible low light performance with a crazy-high ISO of 409,600. As a result, theP30 Pro edged out Google’s mighty Pixel 3in a photo face-off, which has been ourbest camera phone.
“Apple and Samsung should definitely be worried,” said Avi Greengart, founder and lead analyst for Techsponential. “The perception that a flagship phone has market-leading advances is crucial to the value proposition.”
Of course, it helps that Huawei is strongest in the Chinese market, which is not nearly as saturated as the U.S. or Europe, where more and more consumers are holding onto their phones longer. In Q1 2019, the company shipped 30 million of its 59.1 million smartphones in its home country, or about 50 percent, according to IHS Markit.The research firm said in its report that Huawei is “competing on even footing with Samsung and Apple in the high-end, while expanding into other price segments.”
Huawei vs. Samsung vs. Apple
If Huawei keeps this pace up, it won’t be long before it surpasses Samsung, which has been the No. 1 smartphone maker for years. IHS Markit says that Huawei’s market share worldwide was 18 percent in Q2, compared to 22 percent for Samsung. So if Huawei’s growth rate continues, it could knock Samsung from its pedestal as soon as this year.
The Huawei P30 Pro’s camera offers a 5x periscope zoom and 50x digital zoom. Credit: Tom’s GuideIn April, Richard Yu, CEO of Huawei’s consumer business group, said the company expects to be theworld’s largest smartphone brandby 2020. And right now, its phones look quite favorable compared to Samsung’s. For instance, the Huawei P30 Pro has a superior camera to the Galaxy S10, and the foldableHuawei Mate Xhas garnered more positive early reaction from critics than the troubledGalaxy Fold.
“Apple and Samsung should definitely be worried.” – Avi Greengart, founder and lead analyst, Techsponential
Huawei also has its Honor brand, which offers more aggressively priced devices targeted toward younger audiences. TheHonor 20 and Honor 20 Prowill be introduced at a press event in London May 21. In addition to sporting a Galaxy S10-like, hole-punch display up front, the Honor 20 is rumored to offer Alexa integration and periscope camera that’s very similar to the Huawei P30 Pro.
Add it all up and Samsung could be in trouble.
“Huawei has invested a lot of money into its brand to help them grow presence on a global basis,” said Tuong H. Nguyen, senior principal analyst at Gartner. “It’s also improved its quality on smartphones to be able to compete with tier 1 vendors like Samsung.”
Where Apple and Samsung still win
While Huawei may have overtaken Apple as the world’s second biggest smartphone maker, it still trails Apple when it comes to ecosystems. Yes, Huawei phones offer Huawei’s own EMUI interface, and the company offers a Mobile Cloud storage service. Huawei also has a music service in the Middle East and Southeast Asia, as well as a video service in China, Italy and Spain. But it doesn’t provide the breadth of services that Apple does — and that’s unlikely to change given Apple’s push tobeef up the services side of its business.
The foldable Mate X demonstrates Huawei’s innovative design, but the company is behind on services. Credit: David Ramos/Getty ImagesSamsung is ahead of Huawei in services, too, but also when it comes to offering a wide range of devices that work together, such as the Galaxy S10 andGalaxy Buds, smartwatches like theGalaxy Watch Activeand also the way Samsung’s phones can work with its TVs and other appliances.
“If you think about Samsung, they’re traditionally very good at tech and hardware, but they’re also looking to deliver a holistic experience in terms of providing features and functionality to drive these experiences as well,” said Nguyen. “Think about Samsung Pay, Bixby, and the spectrum of consumer electronics devices offered by the company.”
Of course, Samsung is not standing still on the phone front. TheGalaxy Note 10will launch this summer, and the company will be bringing its lower costGalaxy A Serieshitting the U.S. this year. Plus, Samsung is launching one of the first5G phoneson multiple carriers in theGalaxy S10 5G. “Samsung is building 5G launch phones at multiple carriers in multiple geographies – an astonishing feat of engineering and logistical innovation,” said Greengart.
Nevertheless, it looks as though Samsung’s reign as the king of smartphones could be coming to an end.