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According to statistics from the International Data Corporation, the Chinese electronics giant Huawei has overtaken Apple to become the world's second largest supplier of smartphones.
This important step comes as smartphone sales are declining around the world and Huawei is being scrutinized for device security and fraud charges.
Huawei was the only smartphone manufacturer among the top three to record an increase in shipments in the first quarter of 2019. The company recorded annual growth of 50.3 percent in the first quarter and gained 19 percent of the market share. World. IDC reports.
The company is well positioned to eventually become the world's largest supplier of smartphones, Samsung, and the place ahead of Apple. Apple smartphone shipments fell 30.2% in the first quarter of 2019 compared with the same period of the previous year, reports the IDC.
Apple held 11.7% of the global market share in the first quarter of 2019, compared to 19% for Huawei. This represents a significant change from the first quarter of 2018: Apple accounted for 15.7% of the global smartphone market in the prior year, compared to 11.8% for Huawei.
Samsung saw its volumes fall by 8.1% in the first quarter of 2019, even though it still ranks first with 23.1% of the global smartphone market.
Huawei takes flight as rivals fight
Apple and Samsung are not the only big companies to suffer the effects of the slowdown in the smartphone market. In its recent earnings report, Google said its Pixel smartphone sales were down and LG's mobile division had recently announced sales of $ 1.34 billion in the first quarter, up from $ 2.01 billion in the first quarter. dollars in the same quarter of last year.
Huawei posted record financial results for 2018 in March, with revenues exceeding $ 100 billion for the first time, an increase of 19.5 percent year-over-year. Its consumer business, which includes smartphones, grew by 45.1% in 2018.
Part of Huawei's success can be attributed to its broad product portfolio, which includes both high-end phones such as its Mate and P ranges and low-end devices under the Honor brand. The high-end models of the company have also created a strong brand affiliation for these cheaper products, according to IDC.
At the same time, Apple is struggling to keep pace with its competitors despite its take-back programs and price reductions in China, especially as competitors are preparing new models with 5G connectivity and foldable models, such as the IDC note.
Read more: Apple is expected to launch 3 new iPhones this year. Here is everything we know so far.
However, market share and smartphone sales are not the only measures to measure success. Although Huawei claims more of the global smartphone market than Apple, the iPhone maker has generated an annual business turnover of about $ 266 billion during its 2018 fiscal year, more than double of Huawei 's business figure for 2018.
Apple is changing its strategy to focus on other products, such as services, to offset the slowdown in iPhone sales. Revenues for its service division reached a record $ 11.5 billion, the company announced in its recent earnings report, and plans to launch a new pay-TV service and gaming service to further boost this. product segment.
The controversies going on at Huawei
Nevertheless, Huawei's business is booming, even though it is being scrutinized more than ever before in the world.
Earlier this year, US government officials participated in the Mobile World Congress conference in Barcelona to lobby their European allies so that they do not use Huawei equipment in their networks. This decision stems from the lingering suspicion of whether corporate technology is a back door for the Chinese government.
Huawei denied these claims during his press conference at the Mobile World Congress and more recently in his tax return.
"The easiest way to destroy a fortress is to attack it from the inside," wrote Guo Ping, president of Huawei's rotation, in a press release. "And the easiest way to strengthen it is from the outside, and in the future, we will do everything in our power to get rid of outside distractions, improve management and move towards our strategic goals. . "
The Chinese tech giant was also indicted earlier this year for fraud and conspiracy trade secrets, for which he pleaded guilty.
Huawei's chief financial officer, Meng Wanzhou, is also awaiting extradition to the United States for fraud. The Supreme Court of British Columbia in Vancouver has set a hearing date for May 8th.
Smartphone sales slow with rising prices
Huawei's success is part of a worldwide decline in the smartphone market.
According to IDC, smartphone sales in the first quarter of 2019 fell 6.6% year-on-year, representing a sixth consecutive quarterly decline. In 2017, shipments did not increase for the first time, as May Meeker, former partner of Kleiner Perkins, pointed out in Caufield & Byers in his 2018 Internet Trends report.
Smartphone sales exploded between 2011 and 2016, with 2013 marking a pivotal year as smartphone sales outperformed functional phones for the first time. But with the growing adoption of smartphones, consumers have stopped upgrading their phones, as smartphones have become increasingly expensive.
Read more: Apple claims that products such as Apple Watch and AirPod are doing so well that its apparel business is as important as a Fortune 200 company.
The Apple's high-end iPhone XS Max starts at $ 1,099, while its smaller iPhone XS starts at $ 999 and the cheapest iPhone XR starts at $ 750. In 2016, the iPhone 7 flagship of the company was priced at $ 649.
Samsung has followed a similar trajectory. The company announced four new versions of its flagship product, the Galaxy S10, in February, priced from $ 750 to $ 1,300, while the Galaxy S7 from 2016 began at $ 669.99.
New smartphone models in recent years have introduced progressive upgrades, making it difficult to convince consumers to pay $ 1,000 for upgrading to the latest version.
Apple is expected to launch three new iPhones in September, which will feature new features such as reverse wireless charging and a three-lens camera for the high-end model.
But Ryan Reith of the IDC thinks that Huawei should retain its second place this year. "This new ranking of Samsung, Huawei and Apple is very likely what we will see when 2019 is over," he wrote.
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