Huawei expected to drop to seventh globally in smartphone production amid US sanctions: report

Celia Chen
·3-min read

Huawei Technologies Co. is predicted to fall from its current position as the third-largest smartphone maker to seventh place in 2021 amid US sanctions, even as the industry expects to produce more handsets this year, according to research company TrendForce.

The Shenzhen-based telecommunications equipment giant wrested the crown of “world’s biggest smartphone vendor” from South Korea’s Samsung just last summer, but fresh US sanctions in August that cut off Huawei’s access to key software, hardware and partners have shrunk its market share.

Huawei’s global smartphone production volume is expected to drop from 170 million last year to 45 million this year, according to the TrendForce report released on Monday. The report also predicted that the Shenzhen-based company’s share of the global 5G market will drastically decrease from 30 per cent last year to just 8 per cent this year.

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

TrendForce said in the report that Huawei’s sale of its former budget smartphone business Honor in November last year also contributed to its fall in the ranking.

Market research firms IDC and Strategy Analytics have respectively estimated that Honor accounted for 28 per cent and 38 per cent of Huawei’s total smartphone shipments in the first half of last year. Even if US sanctions are lifted in the future, Huawei may find it hard to regain its market share as it will be in competition with its former subsidiary, TrendForce said.

Huawei’s former budget smartphone unit has big plans for 2021

At the same time, TrendForce predicted that the global smartphone industry will grow this year thanks to rising demand from emerging markets and a gradual return to normal life after the Covid-19 pandemic.

Global smartphone production will grow 9 per cent annually to reach 1.36 billion units in 2021, after the industry suffered its biggest-ever annual drop of 11 per cent last year, TrendForce said. However, it noted that the situation may still change due to uncertainties related to the pandemic and the international environment, as well as wafer foundries’ capacity limitations.

Samsung, Apple and Chinese smartphone brands Xiaomi, Oppo, Vivo and Transsion are expected to be the top six players in 2021 and make up 80 per cent of the global smartphone market, said the report.

In addition, TrendForce predicted that the industry will continue to ramp up production of 5G smartphones, increasing from 240 million units last year to 500 million this year.

With the Chinese government’s active promotion of 5G technology, Chinese smartphone brands are expected to account for about 60 per cent of the 5G smartphone market this year, the report said.

More from South China Morning Post:

This article Huawei expected to drop to seventh globally in smartphone production amid US sanctions: report first appeared on South China Morning Post

For the latest news from the South China Morning Post download our mobile app. Copyright 2021.