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Back to basics for Huawei as China remains the bedrock of success

Pretty much everyone in the technology world knows Huawei is under pressure, though with its dominance of the Chinese market, it has more than enough to weather the storm.

According to new estimates from IDC, Huawei has now officially become number one in the market share rankings for tablets in China. These estimates follow smartphone shipment figures which demonstrate extraordinary dominance from the under-fire firm.

Over third quarter of 2019, Huawei shipped 2.12 million tablets, up 24.4% from a year ago, to take 37.4% of the total market. It has leap-frogged Apple to lead the market, the iLeader currently controls 33.8% of shipments, while the rest of the field are no-where near the leading two. Xiaomi currently sits in third position, with market share of 5.9%, a decrease of 47.4% year-on-year.

Although increased tablet sales in China are not going to compensate for the troubles which Huawei are facing in the international markets, alongside the smartphone dominance during the same period, it demonstrates the comfortable position Huawei is currently in.

Talking of smartphone shipments, as you can see from IDC’s figures below, the strong market share position is duplicated.

2019 Q1 2019 Q2 2019 Q3
Shipments (Million units) 29.7 36.3 41.5
Market share 35.5% 37% 42%
Year-on-year growth 40% 27% 64.6%

And even with heavy criticism from the White House, Huawei is maintaining its position as the leading network infrastructure vendor worldwide. In the third quarter, Dell’Oro estimate Huawei owned 28%, though some might suggest this is due to its dominance of the Chinese market. The firm has been missing out on valuable contracts in some European markets though it doesn’t seem to be having a disastrous impact.

Noise from the White House might be starting to have an impact on the Chinese vendors influence on certain Western markets, but let’s not forget how Huawei created such a dominant position in the first place.

Some might suggest the dominance of Chinese companies on the Chinese market is only due to an uneven playing field, Western challengers might be handicapped when it comes to competition, but this is largely irrelevant. This is not a situation which is likely to change in the future, regardless to the number of complaints, therefore it should be accepted.

This dynamic afforded Huawei the confidence to aggressively expand in bygone years, and it will continue to be a comforting thought as uncomfortable aggression floats both directions out of the US.

With continued dominance in the Chinese smartphone, tablet and network infrastructure segments today, Huawei has firmed up its bank accounts. The spreadsheets will not be under anywhere near as much threat as they potentially could have been, as the management team can rely on revenues continue to flow through the domestic market. This is the same position Huawei was in prior to its international expansion.

Huawei is not necessarily a Chinese company anymore. Yes, it was founded in China and the country continues to house its headquarters, but this an international beast with considerable influence around the world. The management team will not be happy its international revenues are being eroded, though the Chinese domestic market can prop this giant up; it is that big.

Irrelevant to the amount of noise coming out of the White House, and regardless of the success it has in convincing its allies to ditch Huawei as a vendor, it will always have the Chinese domestic market to lean on. And as long as it is still one of the country’s leading companies, it will always have the opportunity to expand aggressively internationally. It just has to wait for the anti-China rhetoric to die down, like it did in the early 2010s.


2 comments

  1. Avatar Arild Vollan 11/11/2019 @ 8:17 pm

    Boycotting Huawei will simply lead to employees and expertise leaving one Chinese company for another.

    Even if Europe opts for Ericsson or Nokia, it will still use Chinese 5G products. All technology companies have one thing in common, much of their equipment is produced in Chinese factories.

    Nokia and Ericsson have 12,000 employees in China for the production of the companies’ 5G networks. In addition, they have cooperation agreements with many Chinese factories for delivering components to the companies’ 5G networks.

    American inspectors have probably not called in at Nokia Shanghai Bell or they would have realised that Nokia is, in a real sense, a Chinese company. Most 5G components are produced in China anyway, so it is puzzling that the US insists Europe and Australia cannot use Huawei technology.

    Ericsson has six R&D centers in China, with totally 5000 R&D engineers. 90% of Ericsson product involved five Chinese R&D center. Nanjing Ericsson Panda has developed into the world’s largest supply center for Ericsson. 40% of Ericsson’s global shipments come from here, and the localization rate of products is close to 100%.

    For Nokia 7,000 employees in China focusing on customers, service, R&D, manufacturing and supply chain. Nokia has six R&D innovation hubs and three manufacturing facilities. If Europe boycotts Huawei, Nokia has the plans ready: Adding 2500 new Chinese employees.

    Way should Europe just to support the US’ new-found policy of protectionism?

    Why should Europe pay the costs, take the risks and gamble with their economic development and growth?

    Blindly following the US will have enormous consequences for European business. It will delay the development and deployment of artificial intelligence and the next generation of wireless services, just to support the US’ new-found policy of protectionism.

    United States influence

    Over the past year, countries all over the world have been visited by President Trump’s envoys. The message is threatening: We must choose: Either China or the United States. Which has led to debates and fears. We are moving away from “one world, one system”.

    Common cyber security and global standards will be reduced. Our world is hardly more secure if we contribute to a polarized world. Especially smaller countries, with an open economy, rely on fewer trade barriers, not more. We should not help to tear down the trade regime created after World War II.

    Europe must work for common international standards, joint efforts on cyber security, and work with several global players.

    Neither Europe can boycott a company because it has an ethnic Chinese origin. Ethnic discrimination has been tried by Europe (before the Second World War) .

    The purpose of developing technologies is to give people more options, and greater diversity.

    Technological advances, such as AI and 5G, must be used to create a more peaceful world. And do not be abused, as the United States now does, to establish a new Cold War.
    Just to make the US Great again ..

    Please read my article in South China Morning Post :

    Can Europe pay the price of following the US’ Huawei boycott?

    https://www.scmp.com/comment/insight-opinion/united-states/article/3002164/price-europe-following-us-huawei-boycott-may

  2. Avatar Jack 12/11/2019 @ 2:11 am

    Huawei is a great international company because the technology comes from USA, Germany, Taiwan, UK, Japan. Huawei sources for parts from all over the world. Huawei also conduct RandD from labs established in many countries. The 5G technology benefit everyone. Only USA stupidity for conceited dominance in 5G when it really cannot is the main problem of USA losing the technology race. All countries embracing Huawei is winning, USA is losing badly.

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