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Huawei thrives despite security concerns

Huawei thrives despite security concerns

Handset shipments have jumped as the UK says yes to 5G rollout

Credit: Dreamstime

Smartphone maker Huawei Technologies thrived in 2019 at the expense of smaller Chinese rivals and Apple even as the smartphone market shrank further and consumers favored phones with 5G technology, data shows.

Handset shipments for Shenzhen-based Huawei jumped 35.5 per cent to 142 million in 2019, from 104.8 million a year earlier, according to estimates from market research firm Canalys.

Shipments for Apple's iPhones decreased about 21 per cent year-on-year to 27.5 million. This comes as the domestic market for smartphones shrank 15 per cent annually, according to the report released on Tuesday.

Growth in smartphone sales stagnated in 2018 and 2019 as consumers postponed purchases, opting to wait for companies to release more 5G-enabled models. Huawei has already released four of these in China, while Xiaomi Corp has released two.

Other Chinese Android makers are racing to release 5G phones in the hope that consumers will upgrade their handsets as China rolls out its 5G network to most big cities this year.

Xiaomi's full-year shipments fell about 21 per cent in 2019. Rivals Oppo and Vivo dropped 17 per cent and 19 per cent, respectively, over the same time period.

Huawei remains at the center of US-China tensions. Last year, Washington imposed restrictions on the handset maker that barred American suppliers from selling goods and services to it, citing national security concerns. Huawei has denied these charges.

But the restrictions have had little impact on its ability to sell phones domestically. However, losing access to Google's services had affected the company's business overseas.

The sanctions in fact helped boost Huawei's sales in China on the back of patriotic consumer purchases. The company's aggressive marketing has helped as well.

Huawei's fortunes picked up as iPhone sales lagged in 2017 and 2018, following a peak in the previous years. Last year, Apple offered discounts on iPhones to boost sales, a move that Chief Executive Officer Tim Cook later said was successful.

Canalys estimates iPhone sales fell 12 per cent in the quarter ended Dec. 31. In the preceding quarter, sales had fallen 28 per cent.

However, this year could be a better one for Apple, with the company expected to launch its first 5G-enabled iPhone.

According to Nicole Peng, who tracks China's smartphone sector at Canalys, the company's latest iPhone 11 model is the best-selling 4G device in China. Its older models are still dragging down overall sales.

The results come as Britain moves to allow Huawei a limited role in building its 5G networks.

The UK government said high-risk vendors would be excluded from the sensitive core of networks, and there would a 35 per cent cap on their involvement in the non-sensitive parts.

The US wanted Prime Minister Boris Johnson to ban Huawei completely, arguing that Beijing could use the company's equipment to steal Western secrets. Huawei has denied any involvement in espionage.

(Reporting by Josh Horwitz; Editing by Maju Samuel; Additional reporting by Paul Sandle; additional editing by Guy Faulconbridge)


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