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Huawei is quickly catching up to Apple in the smartphone market

Krystal Hu

It’s been an arguably hard year for Huawei. The Chinese telecom giant has been grilled by the United States over security issues. Its CFO Meng Wanzhou was arrested in Canada and faces criminal charges filed by the U.S. But it has also been a momentous year for the phone maker, as it narrows Apple’s lead in terms of global smartphone shipments, according to the latest data from IDC.

Huawei managed to grow in the smartphone market despite an overall slowdown in the global smartphone market, which was down 4.1% in 2018. The Shenzhen-based company posted an impressive 33.6% growth in 2018, in contrast to Apple, which reported Tuesday iPhone volumes were down by 3.2% for the year. The gap between Huawei and Apple in full-year smartphone shipments has contracted to its lowest point ever: just 2.8 million.

In the second and third quarter of 2018, Huawei even overtook Apple as the second largest in worldwide smartphone sales. Apple, which stopped reporting iPhone unit sales since November, had trouble selling new iPhone models. IDC data shows iPhones’ two largest markets — the U.S. and China — both experienced the worst year for smartphone performance.

(David Foster/ Yahoo Finance)

“Apple is certainly not out of the game, but the likelihood of not having a 5G iPhone in 2019 means it will need to tell a strong iPhone and, more importantly, ecosystem story to succeed,” Ryan Reith, program vice president at IDC, said in a statement on Wednesday.

Huawei, on the other hand, has been largely absent from the U.S., the world’s second-largest smartphone market. Starting from making middle- and low-end phones at affordable prices, Huawei has extended the success to its premium line Honor. The line now represents nearly half of Huawei’s overall volume, IDC says.

Huawei has been expanding globally and reducing dependence on the Chinese market, which now represents about half of its smartphone business. Facing both economic and political headwinds, Huawei’s founder Ren Zhengfei cautioned that smartphone growth will be slower In 2019.

“We might face challenges and difficulties in the international market,” Ren told reporters in January. “We are expected to continue our growth in 2019, but that growth will not be greater than 20%.”

Krystal Hu covers technology and trade for Yahoo Finance. Follow her on Twitter.

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