US sanctions against Huawei are really taking hold. A new report from Canalys Research shows that Huawei slipped to sixth place for global phone sales in the fourth quarter of 2020, a dramatic drop from its top spot earlier in the year. In Canalys’ current market share table, Huawei has been banned from the “other” category.
Being stuck in “other” means there’s no clear year-over-year decline in the Canalys data, but it does mention that Huawei sold 32 million phones in the second quarter of 2020. We can look at last year’s Q4 2019 report, where Huawei sold 56 million units, and suggest a year-over-year decline of 42 percent. All of the other Chinese vendors in the Canalys chart posted strong double-digit gains ahead of Huawei, with Xiaomi being the big winner with 31% year-on-year growth. Huawei is now behind Apple, Samsung, Xiaomi, Oppo and Vivo.
The US export ban began in May 2019, and we don’t start to see the full effects on Huawei until a year and a half later. Huawei’s sales will likely fall even further in the future. The company announced a major change in November 2020, saying it was selling its budget “Honor” brand to a third party to keep its existing supply chain alive. Honor’s buyer is listed only as “a consortium of more than 30 agents and dealers.”
Huawei selling Honor would be a bit like GM selling Chevy. The companies all chose the same coin bin, used the same software, and were essentially the same devices aimed at different markets, with some modest feature tweaks. Since this was done in an effort to keep Huawei’s existing suppliers running, it still appears there won’t be any actual parts 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 it likely won’t. The Honor sub-brand accounted for 29% of Huawei’s sales in 2019, so we’re far from the bottom.