Simon Baker (Program Director)

Last month the head of Huawei’s smartphone operations, Richard Wu, celebrating the company’s expansion in 2018, underlined his company’s prediction that it would become the global leader in smartphones maybe by the end of 2019.

How likely is that?

According to the IDC Worldwide Quarterly Mobile Phone Tracker, Huawei was just behind Apple in the 2018 total at 206 million smartphones. It was still about 86 million short of Samsung’s 292 million.

If it continues to gain as fast on Samsung as it did last year, Huawei will overtake Samsung in 2020, but not by the end of this year. Huawei’s growth rate increased to above 30% this last year, having dropped back to little over 10% the year before after a long string of big increases – Huawei only started in the smartphone business to all intents and purposes in 2010.

In comparison, global smartphone leader Samsung has had pretty much static shipments across the last five years, and they dipped slightly last year.

If Huawei achieves its leadership goal in 2020, that is more likely to be in units than in value. This last year the IDC Tracker showed the retail value of Samsung smartphones nearly twice that of those of Huawei at $106 billion.

But Huawei is gaining in value terms faster than in units, and this year it is its new premium model ranges, the P20 and the Mate 20, along with their Pro and Lite versions, which have propelled much of its growth. So it could catch up on Samsung in value too.

The most important implication for the phone industry is not the date when this crossover takes place, it is the cumulative share of the two players.

The total global smartphone market in 2018 was down marginally on the year before at 1.406 billion units, though its value continued to grow, slightly, to 486 billion USD. (Value calculated at retail value before sales taxes.)

Apple takes more than a third of that value. Of the $300 billion that is left, if Samsung is treading water in share, and Huawei is booming, it is pretty clear things must be getting worse for everyone else.

Huawei is not the only brand on a clear upward trajectory: the other big globalizing Chinese players, Xiaomi, OPPO and vivo saw their cumulative sales grow 15 percent to 337m, a total higher than that of Samsung.

The shipment totals of these top five Android players have risen to 835m in 2018 from 506m in 2014 in a basically flat smartphone market. This means the percentage of the Android market available to other brands has fallen from just over half down to one third, and in unit terms from 555 million to 361 million.

In value terms, the top five Android players now account for over three-quarters of Android market value.

Tough times for everyone else in the business.

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