From first to sixth: Huawei’s phone business wreaks havoc thanks to US sanctions

US sanctions against Huawei are really taking root now. A new report from Canalys Research shows Huawei fell to sixth place in global phone sales in the fourth quarter of 2020, a dramatic drop from its first place earlier in the year. In the current Canalys market share table, Huawei has been banned in the “other” category.

Being stuck in “other” means there isn’t a clear year-over-year drop in Canalys data, but it does mention that Huawei sold 32 million phones in Q2 2020. We can look at last year’s fourth quarter 2019 report, where Huawei sold 56 million. units, and arrive at a year-over-year decline of 42 percent. All of the other Chinese suppliers in Canalys’s chart saw big double-digit gains in place of Huawei, with Xiaomi being the big winner with 31% year-over-year growth. Huawei is now behind Apple, Samsung, Xiaomi, Oppo and Vivo.

The export ban to the United States began in May 2019 and we are starting to see all the effects on Huawei a year and a half later. Huawei’s sales are likely to fall even more 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 over 30 agents and resellers”.

Huawei selling Honor would be a lot like GM selling Chevy. The companies were all choosing from the same parts bin, using the same software, and were essentially the same devices for different markets, with a few modest feature changes. Since this was done in an effort to keep Huawei’s existing suppliers in business, it still looks like there won’t be any real part differences between the two companies, and it’s unclear how they can. exist “separately”. For now, however, Huawei is banned and Honor is not, so the plan is working!

Canalys’ Huawei data all includes the ominous asterisk that it “includes honor sales”, and going forward, that likely won’t. The Honor sub-brand accounted for 29% of Huawei’s sales in 2019, so we’re far from the lowest.