Huawei beats Apple to become number two smartphone seller

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Apple reported strong results for its fiscal third quarter on Tuesday but the iPhone-maker lost its position as the world’s number-two smartphone vendor, according to multiple analyses.

Research firms International Data Corporation (IDC), Counterpoint Research, IHS Markit and Canalys all reported that Chinese smartphone maker Huawei leapfrogged Apple to second place, based on the number of devices both firms shipped in the quarter that ended on June 30.

According to preliminary IDC data, Huawei shipped about 54.2 million handsets for the quarter, registering a 40.9 percent on-year growth. Meanwhile, Apple shipped about 41.3 million units for 0.7 percent growth against the comparable year-ago period.

The iPhone-maker missed Wall Street’s estimate of 41.79 million devices for the quarter.

Those numbers put Huawei with 15.8 percent share of the market and Apple with 12.1 percent, according to IDC.

Analysts said that Huawei was adding more top-end features into its flagship smartphones. For example, the company added three cameras on its P20 Pro device. As a result, Huawei is getting “increasing brand recognition in Europe and Asia” that is allowing the company to challenge the likes of Samsung in many price tiers, according to Gerrit Schneemann, senior research analyst for smartphones at IHS Markit.

Research firm Canalys also attributed Huawei’s performance for the quarter to strong sales of the P20, as well as the success of its Honor brand. The company said Huawei shipped close to 4 million Honor-branded smartphones outside of China for the quarter, representing a 150 percent increase from the same period last year.

“Despite its failure to strike a U.S. carrier partnership earlier this year, (Huawei) has turned around quickly, moving away from its drive for profitability and focusing instead on finding volume growth at the low end,” said Mo Jia, a Shanghai-based analyst at Canalys. “Honor, which has long been a major brand in China but relatively small overseas, has taken a pivotal role in this strategy.”

The smartphone maker, which also makes telecommunication network equipment, has been trying to enter the U.S. market, first through a partnership with AT&T that was ultimately called off. A top Huawei executive raged against American carriers, accusing them of depriving customers of choice. Reports said U.S. lawmakers urged AT&T to pull out of the deal.

Earlier this year, top U.S. intelligence officials said they would not advise Americans to use products or services from Huawei, implying that it may have ties to the Chinese government that posed cybersecurity risks to the United States. The company responded by saying it posed no greater cybersecurity risk than any other tech vendor. More recently, the company said it does not see itself becoming the target of U.S. sanctions and will keep buying U.S. chips this year.

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