Devices / Insider / News

Huawei becomes world’s 2nd biggest smartphone maker

Huawei has surpassed Apple as the second biggest smartphone maker in the world behind Samsung, according to new research by the analysis company Counterpoint Research.

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First of all, What is Counterpoint Research?

Counterpoint Technology Market Research is a global research company specializing in technology products in the TMT sector. It provides services to major technology companies and finance companies with a combination of monthly reports, customized projects and detailed analysis of mobile and technology markets. Its main analysts are experts in the field with an average duration of ten years in the high technology sector

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Commenting on this important competitive smartphone development, Peter Richardson, director of Counterpoint Research, says: “This is a significant milestone for Huawei, the largest Chinese smartphone brand with a growing global presence. It speaks volumes for this primarily network infrastructure vendor on how far it has grown in the consumer mobile handset space in the last three to four years.”

“The global scale Huawei has been able to achieve can be attributed to its consistent investment in R&D and manufacturing, coupled with aggressive marketing and sales channel expansion.”

Last month’s sales have not yet come out, but data from June and July show that Huawei has beaten the giant at Cupertino, California, and August seems to be out already.

Huawei is a company that has been operating in the network infrastructure industry for a long time, but in recent years has started to penetrate more deeply into the consumer market with smartphones.

Its incredible growth, says Counterpoint Research, is largely due to “its constant investment in research and development and production, along with an aggressive expansion of the sales and marketing channel”.

Chinese brands like Huawei rely heavily on direct sales, where the consumer buys a telephone with a down payment. This is why he had problems in a conventional way in the US market. UU., Where the operator-based model dominates.

But this is in contrast to their performance in Europe, Latin America and, of course, their homeland, China, where most of the growth is happening.

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How did Huawei manage to beat established rivals like HTC, LG, and Sony in all these markets? According to Counterpoint, Huawei and other Chinese brands such as Oppo, Vivo, and Xiaomi have managed to “earn more and spend more” than the competition.

HTC began a downward spiral from which they have not yet recovered, while Chinese companies have exploded and “become as important as Samsung or Apple for the global supply chain, application developers, and distribution channels, as they continue to grow in scale faster than the incumbent market share leaders. “

Huawei faces two main problems: one is short-term and the other is a big problem that includes its strategies and the business model as a whole.

The first concerns Apple’s forthcoming announcement of the new iPhone line, which is said to include a special edition model of the tenth anniversary that could entail a major change in design and functionality.

Counterpoint research largely expects this to be a strong reason why Apple has temporarily lost momentum, while Huawei’s latest flagship, the P10 (and the P10 Plus), was launched just a few months ago. The thought is that Apple’s loyal consumers have waited for their old phones, waiting to switch to the new device.

The other problem is Huawei’s broader marketing strategy, which sees a large number of phones collectively compensating for their greater market share, rather than the “heroic devices” that drive the brand on their own.

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This is why, according to Counterpoint Research, the Chinese company does not have a single model in the ranking of the top 10 best-selling devices, still dominated by Apple’s iPhone.

Commenting on the best-selling models in July, senior analyst, Pavel Naiya said: “Apple has continued to drive its main impulse with the iPhone 7 and 7 Plus, still the best-selling models in the world, OPPO has been one of the brands fastest growing worldwide thanks to the popularity of models that include the flagship OPPO R11 and OPPO A57 mid-level that have conquered the third and fourth place respectively.

These were followed by the flagship Samsung Galaxy S8, Xiaomi Redmi Note 4X and Samsung Galaxy S8 + The 32 GB Apple update of the venerable iPhone 6 allowed it to regain momentum during the month, with the popularity in the prepaid markets surpassing the Samsung Galaxy J7.

Mr. Naiya added. “While Huawei climbed to be the world’s second largest brand overall, it is surprising to see none of its models breaking into the top ten rankings. This is due to a multiple SKU portfolio that currently lacks a true hero device.”

“While having a diverse portfolio allows Huawei to fight on multiple fronts, it does little to build overall brand recognition; something Huawei badly needs if it continues to gain share. While Huawei has trimmed its portfolio, it likely needs to further streamline its product range like Oppo and Xiaomi have done – putting more muscle behind fewer products.”

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