It’s Official: Huawei is Number Two in Smartphone Sales

Posted on August 28, 2018 by Paul Thurrott in Android, Apple, iOS, Mobile with 38 Comments

We now have confirmation that Huawei has surpassed Apple to become the world’s second-biggest maker of smartphones: Gartner has belated weighed almost a month after IDC did, noting the same milestone.

As I first reported in Apple Delivers a Blockbuster Quarter, But… on August 1, Apple sold about 41 million iPhones in the quarter ending June 30, flat with the year before. But IDC, at the time, provided some bad news, noting that Apple had slipped from second place, by sales, in the smartphone market to China-based Huawei, a firm that basically doesn’t even sell handsets in the United States.

But now that Gartner has weighed in too, we can take a closer look at the results.

Using my normal averaging model, the smartphone industry shipped about 358 million handsets in the second quarter of 2018, roughly flat with the 357.4 million it sold in the same quarter a year ago.

Samsung, as usual, emerged as the number one smartphone manufacturer with 72 million units sold, good for approximately 20 percent marketshare. A year earlier, Samsung had sold about 81.4 million units, for a loss of about 2.8 percentage points overall.

Last year, Apple was the number two maker of smartphones with 41 million units sold, good for 11.5 percent marketshare. As you might expect, it’s marketshare in the most recent quarter was roughly identical.

The problem, for Apple, is that Huawei sales have surged in the same time period. A year ago, the China-based handset maker sold about 37 million units, just below Apple, garnering quarterly marketshare of 10.4 percent. This year, sales jumped to 52 million units. And Huawei now controls 14.5 percent of the market, well ahead of Apple.

And Apple has two other China-based smartphone makers nipping at its heels, as both Xiaomi and OPPO have experienced tremendous year-over-year growth. If these trends continue, Xiaomi, at least, will easily surpass Apple within a year: It saw unit sales grow from over 21 million units in Q2 2017 to over 32 million units in the most recent quarter. And OPPO came is right behind it with 29 million units sold in Q2 and a similar year-over-year growth trajectory.

Is Apple prepared for a number five finish by mid-2019? Its recently-revealed iPhone strategy suggests it is: Apple plans to raise the average selling price of its iPhones and lean more heavily on iPhone-adjacent subscription services. If successful, it can claim, fairly accurately, that marketshare doesn’t matter as much as profits and user engagement.

 

Tagged with ,

Join the discussion!

BECOME A THURROTT MEMBER:

Don't have a login but want to join the conversation? Become a Thurrott Premium or Basic User to participate

Register
Comments (38)

38 responses to “It’s Official: Huawei is Number Two in Smartphone Sales”

  1. Necron

    If apple do care about market share, they would produce some cheap devices with 2-sims and memory card slot (IR, radio, TV, you name it). Many people in Asia prefer to have more features for less money despite these features are mostly non-sence. Apple is fine with current situation as they don't care about low-cost and low-margin market.

    And also companies like Xiaomi feel very ok to just copy design of apple's products and even their marketing stuff, like product renders and ads. Of course they will never sell those in US because of legal case will be started against them momentary.

  2. GT Tecolotecreek

    Fixed it for you...

    We now have confirmation that Huawei has surpassed Google to become the world’s second-biggest maker of smartphones: Gartner has belated weighed almost a month after IDC did, noting the same milestone.

    As I first reported in Google Delivers a Blockbuster Quarter, But… on August 1, Goole sold about 410 Pigels (half of which were refurb warranty replacements) in the quarter ending June 30, flat with the year before. But IDC, at the time, provided some bad news, noting that Google had slipped from second to last place, by sales, in the smartphone market to China-based Huawei, a firm that basically doesn’t even sell handsets in the United States, to last place.

    Samsung, as usual, emerged as the number one smartphone manufacturer with 72 million units sold, good for approximately 20 percent marketshare. A year earlier, Samsung had sold about 81.4 million units, for a loss of about 2.8 percentage points overall.

    Last year, Google was the at the bottom of smartphones with 41 units sold, good for .0005 percent marketshare. As you might expect, it’s marketshare in the most recent quarter was roughly identical.

    The problem, for Google, is that Huawei sales have surged in the same time period. A year ago, the China-based handset maker sold about 37 million units, garnering quarterly marketshare of 10.4 percent. This year, sales jumped to 52 million units. And Huawei now controls 14.5 percent of the market, well ahead of Google.


    See, anyone can write click bait headlines that don't reflect the actual relevant facts!

  3. Steven Lendowski

    What many of the US-centric readers here miss: Outside of the US, Apple phones are now on the way to becoming a niche product.

    And NOT only in developing countrys, in Afrika, South America, Asia, Eurasia.. But Europe and western countrys aside from the US.

    And while Apple may still make huge profits, even with low market share, the tide has already turned against them.

    Again, outside of the US most ppl buy phones not from carriers, or get them on credit. This alone makes most ppl not buy a 800€-1000€ phone.


    Plus, for the majority of "normal" users aside from tech savy persons, there is no real need to upgrade. No innovation, that makes them "need" (or better "want") to spend a premium for a phone. All Apps and features a "normal" user needs, work quite okay for years on a medium priced phone.


    And now, those ppl here that would have bought a Apple or Samsung flagship some years ago, are totally happy with their 300€ Huawei. And they influence their collegues, friends, family, so now buying a chinese phone here in Europe is nothing bad. Its the opposite: You are someone who got an unbelievable value phone, a premium phone WITHOUT paying a premium, and the idiots are the ppl who pay 1000€ just because "Apple" or "Samsung".


    The biggest tech store here now are advertising the Huawei P20 Pro on the front page, the iPhone X and Samsung Galaxy Phones are on page 3.

    This was unthinkable 2 years ago, but i think that says all about what we can expect in the next 1-2 years. Most innovations in the Android sector are coming from China now, and not Samsung.


    And what Huawei did here in Europe, has just been started by Xiaomi now. In 1-2 years, they will be just as established here as a Samsung Galaxy, and much more than Apple.


    And what the Chinese did in the Smartphone sector, they will surely do in other markets. I would not underestimate them, because the trend is clear, even if the established (western) players can milk their cows for some years to come without facing the alarming reality.


    • jrickel96

      In reply to AllThisEv1l:

      I work with people overseas in Australia, Pakistan, China, Russia, Europe, India, etc. Yes, the masses buy the inexpensive phones. The business class does not - they buy iPhones.


      There's a two tiered setup. Those with money buy the iPhone and those that are more budget conscious do not.


      There's also a two tiered setup in software develop because the amount of money spent on a per user basis for those Android phones is much lower and often funded by ads or by microtransactions. There are growing concerns about the reduction of development on the Android side of quality apps in the future.



  4. TroyTruax

    I bought a Huawei Mate 10 Pro and I couldn't be happier. It works great and most of the time I get 2 days on one charge.

    • wright_is

      In reply to TroyTruax:

      Same here. And I got the new update this morning - and my P20 got its update last week. A month behind the official Google release, but that is pretty good for an OEM. Not brilliant and could be better, but better than when I had a Samsung and I'd get 2 or 3 updates over 2 years, if I was lucky.

  5. dstrauss

    "If successful, it can claim, fairly accurately, that market share doesn’t matter as much as profits and user engagement." - Since when has Apple NOT beat all other OEM's combined on profitability? According to Forbes (March 2, 2018 - the most recent summary I could find), Apples market share worldwide was 19%, but it share of PROFITS was 87% for 2017. I believe that's down slightly from 2016 when it garnered 91% of industry profits.


    "Move along, nothing to see here" should have been the real title of this article.

    • wright_is

      In reply to dstrauss:

      It just shows how overpriced those handsets are then.

      • dstrauss

        In reply to wright_is:
        And that is relevant how? If customers are still buying at insane prices, then our perception of "overpriced" is irrelevant. How much better, at $60,000, is a BMW sedan than my $37,000 Honda Clarity PHEV sedan, as long as someone wants to pay the price?


    • Jason Peter

      In reply to dstrauss:

      On the other hand, Huawei doesn’t have to go through the trouble of funding an R&D lab. They can just do what every other Android OEM does - wait until Apple releases their next phone, and rev up their copiers... ?


      • wright_is

        In reply to Jason_P:

        Huawei use their own processors (Kyrin) and their own software - the launcher, settings, telephone, sms, calendar and a about 2 dozen other apps are their own brand stuff. They work together with Leica to develop the optics for their cameras. I would say that all requires a fair amount of R&D. They also make a lot of the 4G backbone and traditional networking and are busy developing for 5G, among other things. So, no, no R&D spend at all. :-S

        Oh, wait, making their own processors, yes, you are right, they copied Apple (and Samsung).

        The Kyrins seem to be very good processors, they are certainly fast enough and seem to keep up with the equivalent Exynos processors in the Samsung Galaxy line up. The phones we have certainly don't seem to run as hot as the Qualcom based Nexus phone I had previously.

  6. Jason Peter

    Hmmm... where have I seen one of these before?


    Looks familiar...

  7. Rob_Wade

    Huawei not sold in the US? Have you been to Walmart? I picked up a Huawei Ascend XT2 in the futile attempt to turn it into a near Windows Phone-like device.

    • skane2600

      In reply to Rob_Wade:

      Right. I bought one on Amazon a few months ago and I'm in the US.

    • Brockman

      In reply to Rob_Wade:

      Paul said "basically doesn't even sell handsets in the US" (emphasis mine). Yes, some models are available through some retailers but AT&T and Verizon cancelled plans to offer Huawei; Best Buy dropped them a few months ago; T Mobile has a long-running feud with Huawei. If your device isn't offered through carriers or Best Buy, then Paul's general point is valid-- this is a company with no real presence in the US.

  8. provision l-3

    I'm failing to see how this inherently bad for Apple. As pointed out in the article their marketshare is maintaining. So, Huawei's growth isn't coming at someone else's expense rather than Apple's. So there is either consolidation happening at the lower end of the market, Samsung is losing ground or a combination of both. Seems like the bad news here is more for other makers of Android phones as Huawei is pulling their business.

  9. jrickel96

    The fact is that Apple will still remain #1 in revenue and in profits for phones.


    The average price from an iPhone in the last quarter was close to $730.


    The average price for an Android phone is now under $200. For Samsung it is closer to $250, but still very low.


    72 million Samsung units at $250 average is $18B in revenue.


    41 million Apple units at $730 average is about $30B in revenue - and A LOT more profit.


    52 million Huawei units at $200 average is about $10.5B in revenue.


    The units sold are meaningless compared to the revenue and profit. The other two probably have 5-10% margins on average. Apple is likely 30% or better.


    Android is a platform with a lot of problems. Yes, there's a lot of it around, but OEMs make very little money on it. Constantly driving down the price of handsets is the same thing that caused problems in the PC world with low quality builds, slow CPUs, etc. Guess what is happening to Android?

    • Stooks

      In reply to jrickel96:

      Just so you know I have a iPhone X, a 256gig with Apple Care. I use a ton of Apple products.


      ALL companies rise and fall. IBM, Microsoft etc. Apple fell once before and they will fall again. Their biggest problem is that the iPhone makes up the lion share of their revenue and profits. A "fall" at the wrong time could be devastating.


      Apple's ASP (average selling price) going up is great for Apple. They keep ramping the price and people keep paying it.....until they don't.


      Apple makes "brave" moves like removing the audio jack, or giving you face ID and at the same time removing the finger ID. Apple does not use USB-C like the rest of the world...or at least on the iPhone (Mac is all USB-C now). They keep raising the prices as well and so far sales have not been impacted or at least are flat-ish and not down. I think Apple is one brave move (in the wrong direction) from shattering the hype of the iPhone.


      Add to that smartphones from all vendors have reached the "good enough" stage in terms of features and speed. If I had to get rid of my iPhone X and move to some mid range Android phone (One Plus, Moto etc) I could do it and do it with not much pain. Smartphones, their hardware and services are rapidly maturing and innovation is coming at the cost of change for change sake these days.


      I am a Mabook Pro user (15inch 2017) and I feel like Apple has made too many "brave" moves and I am seeing once loyal Macbook Pro users move to Windows because of crazy price hikes on Macbooks (8th gen 13inch starts at $1799) and things like USB-C only, horrible keyboard, lame touchbar and the removal of the fantastic MagSafe. These people move to Windows and they get almost unlimited choice of hardware and they almost always get way more for their money (RAM, SSD size, up-gradability etc) which means they save money. With Mac sales down 13% last quarter I think Apple has been a bit too "brave" with their Mac decisions.


      If Huawei comes to the US, in a big way, that can't be good for Apple either.




      • jrickel96

        In reply to Stooks:

        I agree. Apple is extremely reliant on iPhones - though I'd argue this is better than Google's reliance on ads.


        Huawei may make some inroads, but it doesn't change behavior from a develop side. Android users don't spend a lot of money on anything.


        Apple has created a halo where A LOT of people make money due to app sales, ads, etc. The iPhone has a disproportionate share of the top tier income brackets in most countries. Huawei is not going to get mindshare there because they are seen as cheap - and Android as a whole is seen as a major non-premium system. Apple has done a good job promoting this.

        • Brockman

          In reply to jrickel96:

          We've been hearing for years about how Android was going to "disrupt" iPhone from the low end and it has yet to happen. Huawei and OnePlus can make all the "flagship killers" they want; they're not going to kill the iPhone.

  10. Brockman

    Have to agree with other commenters; the story here isn't about Apple. Their unit sales have been flat while they've significantly grown their ASP and continue to dominate the profit and revenue columns. What is of interest is the declines for Samsung and presumably HTC and Motorola; all of whom are losing share to Huawei and Xiaomi. I don't know, maybe that is just not as interesting to talk about as Apple, even if it is more to the point? Or maybe the problem is that Paul doesn't have the more detailed Gartner and IDC data that would allow him to look at these numbers and trends and bring out the real story happening within Android.

    • skane2600

      In reply to Brockman:

      "Have to agree with other commenters; the story here isn't about Apple."


      Yet the potentially irrelevant reference to Apple seems, more often than not, to benefit them. How many times have we read reviews of competing products that spend as much time comparing them to Apple products as reviewing the product on its own merits. Regardless of profit margins, if one were to review a Huawei smartphone and compare it to a single competing smartphone, shouldn't the first choice be Samsung and Vice Versa? Why compare to company #3?

      • Brockman

        In reply to skane2600:

        "...if one were to review a Huawei smartphone and compare it to a single competing smartphone, shouldn't the first choice be Samsung..."

        I think that is kind of my point; Huawei's main competition is Samsung (and, I would argue, other secondary Android manufacturers). Huawei is not exploding at the expense of Apple. As for your first point about too much ink being spilled comparing stuff to Apple products, I would again agree with you.

    • Rob_Wade

      In reply to Brockman: Nope, you're not paying attention. Saying Apple's sales are flat has little to do with their market share. In other words, they could continue to sell the same number of iPhones, but if the overall market grows and they aren't, they become less relevant. This becomes even worse it Apple's sales are stagnant and Huawei and Samsung make more MONEY selling cheaper devices.


      • Brockman

        In reply to Rob_Wade:

        First, and to the point at hand, Apple's sales and market share are essentially flat as is the overall market-- though technically the average of Gartner's and IDC's numbers show Apple picking up slight gains in both sales and market share in a fractionally growing market.

        Second, allow me to build upon your pedantry as it relates to market share calculation. While you are correct that one needs to account for overall size of market, it is ridiculous to say that a brand's sales number "has little to do with their market share". Little to do with it? It is in fact the numerator in the market share equation, so it has more than "a little" to do with a brand's market share. It is the entire reason that this article exists.

        Third, your final point about Huawei and Samsung making "more MONEY selling cheaper devices" doesn't seem particularly relevant or even cogent. Samsung just reported markedly lower smartphone revenue and profit. And Apple absolutely dwarfs Huawei in terms of both revenue and profit from smartphone sales.

        Seriously, what was the point of your comment?

  11. Angusmatheson

    I don’t understand why this is about Apple. Huawei’s and Apple’s growth have nothing to do with each other. Now that Apple has a big phone - Apple users are Apple users and its growth is independent of everything else. Huawei’s growth is about he collapse if LG and HTC and the failure of the Pixil phone to take off. That is what Huawei buyers would otherwise have bought. The decline of old Giants and Google’s repeated failure are fascinating stories. I think making this about Apple misses the point. (Even though the table it is Hauwei moving over Apple).

    • skane2600

      In reply to Angusmatheson:

      "Huawei’s and Apple’s growth have nothing to do with each other."


      And yet comparisons between smartphone growth and PC decline is taken as significant. Surely market comparisons between products in the same category are more relevant than cross-category comparisons. Of course, deciding which players are losing by Huawei's growth is pure speculation.

    • Angusmatheson

      In reply to Angusmatheson:

      OK. As I read this, I didn’t mean this to be so trollish. The Apple story is the obvious angle because it is who was “over taken” by Hauwei. But I still think the interesting story is what happened to HTC and LG and Motorola. When they made good phones why couldn’t they sell them when Samsung could? I think they are in a bad place now - LGs Pixil XL is a great example of now not making great phones. Why couldn’t the other established players do what One Plus is doing?

  12. Illusive_Man

    Doesn’t matter. Apple has the mindshare and the profits.

  13. Tony Barrett

    Some are forecasting a consumer push back against these ridiculously expensive premium handsets that nobody actually needs, but are more of a status symbol than anything. Most could happily use an Apple or Samsung device from 2-3 years ago and it would still do everything they need. If it wasn't for planned obsolescence being built in, we'd probably all keep our phones for much longer. The fact Apple see their answer as squeezing yet more out of their buyers by increasing handset costs is just crazy. That really could backfire. Samsung do seem to be innovating again now though by all accounts - there wasn't really much change between the S8 and S9 - certainly nothing to warrant an upgrade, and Samsung knew it.

    The Chinese do seem to be nipping at the heels though - premium features at mid-range prices.

  14. RM

    Market share matters a lot to developers that need app usage or app purchases for income. So, basically, you make an Android app for worldwide use and you cover almost 90% of the market. The other 10% becomes almost unnecessary versus the cost to develop and support the app. Remember Windows Phone had, if I remember right, about 4% worldwide market share at one point. Apple keeps getting closer to that and the closer they get, the less developer time they will get, the more app gap they will get.

    • jbinaz

      In reply to RM:

      Maybe. Apple users generally spend more in the app store than Android users, so it still might make sense for an app developer to spend more time building for iOS. If Apple users are willing to shell out more for a device, they'll probably be willing to spend more for an app if prices go up.

    • Chris_Kez

      In reply to RM:

      The 11.5% market share for Apple comes form sales this past quarter. That is different from usage share, which reflects the overall number of users. Apple's usage share is going to be higher than 12%. There are hundreds of millions of active iOS users (>500MM), and they are a much more profitable target than Android users. Apple is not anywhere close to being worried about developer abandonment.

      • jrickel96

        In reply to Chris_Kez:

        This is true.


        There's actually a lot of evidence that iOS users are far more active and spend a lot more money on everything. Advertising on iOS costs more because it is more effective. Android users spend a lot less money on everything, especially high markup items.


        If you look at ticketed events (music festivals, sports games - college and pro in all countries) and paid apps, iOS is light years ahead.


        For US sporting events for NFL, NCAA, NBA, NHL, and MLB, iOS usage in app is around 80%. In Europe it runs around 70%. Same in Australia. In India it is actually 60% for the Cricket league.


        People who buy things and have money to buy things use iPhones by far globally.

  15. george_perry

    This is a bit off topic but.......After owning the Huawei Matebook X Pro Laptop for a couple of months now, if Huawei can get more sales of this unit in the U.S., Macbook pro's may have some real competition. It also depends on which OS your tied to if any but having used this Huawei laptop, I sold two of my Macbooks as I was not tied to the OS but loved the hardware so I would run Windows on them anyway. I know this is a stretch but it is nice to see some competitive hardware with similar specs to the Macbooks and more affordable. Windows based systems area getting pretty good these days so it will be interesting to see the next wave of Macbook Air's. Pro's, etc.

Leave a Reply