Blocked from entering the world, Huawei returned to suffocate Chinese compatriots

Washington's decision to block Huawei smartphones from using Google's mobile services has caused unintended victims: Huawei's Chinese smartphone makers. When Huawei blocked its international route, it was forced to consolidate its dominance in the domestic market and stifle other rivals.

The first sign of this pain is Xiaomi, when late last month, China's fourth-largest smartphone maker announced plans to reform its leadership team for the fifth time this year. The earthquake came at a time when the business results of the last quarter showed the first time the company's smartphone shipments had dropped since the IPO in July 2018.

Mr. Lei Quan resigns as chairman of Xiaomi China after poor business results in the last quarter.

Unintended losses from the US ban on Huawei

Analysts say Xiaomi's decline could be viewed as an unexpected loss due to U.S. government technology export bans on Huawei.

Flora Tang, an analyst at Counterpoint Research in Hong Kong, said: " Without access to Google's mobile services, Huawei is now forced to focus all its efforts on the Chinese market ," where Google has been banned. For many years now, local customers have preferred domestic alternatives.

Along with Huawei focusing on the domestic market, the ban from the US also created Chinese patriotism that made them more supportive of Huawei, doubling the pressure on other smartphone manufacturers. of this country. Even domestic brands like Xiaomi are no exception.

According to Counterpoint Research, during the quarter from July to September, Xiaomi sold 8.6 million handsets in China, down 38% from the same period last year.

Besides Xiaomi, statistics from Canalys also show that brands like Vivo and Oppo, the second and third smartphone brands in China, were also affected by the ban on Huawei.

In the third quarter, Vivo's market share in China was only 17.9%, down sharply from the market share of 22.6% in the same period last year. Meanwhile, Oppo's share, the sibling with Vivo, dropped from 21.1% to 17.4%. Canalys report shows that Xiaomi's market share slipped from 13.1% to 9%.

Another blow to smartphone makers is a general situation in the Chinese market. The statistics show that the total number of smartphones shipped in the country in the quarter from July to September last decreased by 3% compared to the same period last year, adding even more pressure to other brands.

Contrary to the overall market situation, Huawei's market share soared from 24.9% to 42.4%, almost equal to both Xiaomi, Oppo and Vivo combined.

Huawei grew, countering the entire Chinese smartphone market.

Apple, the only foreign brand in the top five smartphone manufacturers in China, also suffers from shoppers in the eyes of shoppers. From a 7% market share in China during the same period last year, now Apple market share fell to 5.2%.

The escape fled abroad

But this nightmare has not ended here. " The next few months will mark an even more difficult time for Xiaomi and other smartphone manufacturers in China, " said Nicole Peng, vice president of mobile division at research firm Canalys in Hong Kong.

In October, all three of China's largest mobile carriers launched long-awaited 5G service packages. " Huawei is in a strong position to further strengthen its dominance in the Chinese market through the deployment of 5G networks ." Ms. Peng said.

Currently, Huawei is the only Chinese smartphone manufacturer that can produce its own 5G chipset, making it easy to control production costs and sell devices with next-generation connectivity technology at an affordable price. closer than the opponent.

Therefore, Xiaomi and other manufacturers are actively seeking a way to the international market. Xiaomi is preparing to enter the Japanese market from last week. In Europe and Southeast Asia, the markets Huawei is forced to leave, Xiaomi, Oppo and Vivo are increasing their presence. Recently, Oppo opened its first flagship experience store in Thailand, with many others preparing to open in Malaysia, Indonesia, Vietnam and the Philippines.

OPPO's first experience store in Thailand.

Peng said of the three Chinese smartphone makers: " When it is impossible to fight Huawei at home, they are seeking growth from abroad ."

Even so, growth from the international market would probably be too small to change their situation, at least not immediately. In the past quarter, Xiaomi's smartphone sales globally were only $ 4.6 billion, down 7.8% from the same period last year.

References Nikkei