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Huawei Ban Is Hurting Other Smartphone Makers, Including Apple

Neer Varshney

The U.S. sanctions on Chinese telecom giant Huawei Technologies Co. Ltd. are not just hurting the company’s business but the businesses of many other companies which are trying to sell smartphones in China, including Apple Inc (NASDAQ: AAPL).

Huawei Strengthens Domestically

Huawei’s share of the Chinese smartphone market increased to 42.4% in the third quarter compared to 24.9% a year earlier, the Nikkei Asian Review reported on Monday.

The rise in Huawei’s market share has displaced the other top five companies.

Dongguan-based Vivo Communication Technology Co. Ltd, saw its market share slipped from 22.6% to 17.9% in the same time period.

Guangdong OPPO Mobile Telecommunications Corp. Ltd, which continues to have the third-largest market share, slipped from 21.1% to 17.4%.

Beijing-based Xiaomi Corporation (OTC: XIACF) had a market share of 9% in the third quarter compared to 13.1% a year earlier.

Cupertino-based Apple, the only American company to be among the top five smartphone sellers in China, saw its market share slip from 7% to 5.2%.

An Unintended Consequence

The U.S. sanctions have made Huawei more appealing in the country, Flora Tang, a Hong Kong-based analyst told The Nikkei.

"The U.S. ban also has increased the sense of nationalism, which works in favor of Huawei," Tang said. "Many Chinese pledged that they would only purchase Huawei phones."

Huawei was put on the U.S. Department of Commerce’s “entity list” in May earlier this year, at President Donald Trump’s behest, judging it to be a “threat to national security.”

Nevertheless, the Commerce Department has continuously extend a “temporary general license” granted to the company to allow it to import from select U.S. companies.

Alphabet Soup

Google’s parent company Alphabet Inc (NASDAQ: GOOGL) suspended its ties with the company following the ban, meaning that Huawei could no longer rely on Google’s Android mobile operating system for its smartphones.

Huawei answered the ban by developing its own OS, but as The Nikkei noted, its overseas sales remain hurt as consumers worldwide continue to prefer Google’s services.


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