In 2019, the US posted Huawei on the list of entities. Why? The Trump administration saw Huawei as a threat to US security because of its alleged ties to the Communist Chinese government. Some also noted that Huawei recently surpassed Apple was the second largest maker of smartphones in the world and wondered if it had something to do with the US action. Some might argue that placing Huawei on the list of entities may have had a negative effect on the fact that it banned the company’s US supply chain and made $ 18 million with Huawei last year.
Huawei was replaced as the best smartphone brand in China
The Trump administration might have thought that it had sunk Huawei’s battleship by forcing it to replace the Google licensed version of Android with the open source version. But early last year, Huawei briefly took first place to become the world’s largest smartphone maker in a month. This forced the Trump administration to take the next step. The Department of Commerce has tightened an export rule that now prevents unlicensed foundries from supplying leading chips made with U.S. technology to Huawei.
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For the first time ever, Oppo is the best smartphone brand in China
This is the straw that broke the camel’s back, announced exactly one year ago. This prevented Huawei, at the time the second largest customer of the TSMC (behind Apple) contract, from receiving the chips that power its flagship phones. And TSMC has started working out Huawei’s most technologically advanced 5nm chip, the Kirin 9000. the component is earmarked for the sequel to Huawei’s foldable phone, along with the latest versions of its flagship devices. Where placement on the list of entities may have failed, the ban on shipping chips was a grand slam as far as the Trump administration is concerned. The move forced Huawei to sell its sales Honor sub-brand for $ 15 billion, a clever move by the Chinese manufacturer because it moved Honor out of Huawei’s track and could not affect its US restrictions.
Counterpoint estimates that Oppo had 21% of the Chinese smartphone market in January, with Vivo’s 20% share. Huawei, Apple and Xiaomi are in a log jam with 16%. Varun Mishra, senior analyst at Counterpoint Research, explained how Oppo moved to the top in China. “Oppo was able to successfully reposition its product lines in 2020,” said Mishra. “The rebranding of the Reno series and the introduction of a more capable device at a lower price point than its predecessor, helped Oppo capture the affordable premium segment. The strong momentum of the A-series in the middle segment has given the “Oppo’s product portfolio strengthened and it was able to meet the 5G demand in China over a wide price band. This was further helped by the decline of Huawei.”
The downside for Huawei is that the US ban will soon leave it without stock of 5G components. As more than 65% of the devices sold in China during the fourth quarter of 2020 support 5G, Huawei is facing serious problems. The company has tried to maintain an optimistic view and its homemade HarmonyOS will make its smartphone debut on the Mate X2. But the real mood within the company may at least for the time being be described as gloomy. Tom Purdy, the chief security officer of Huawei USA, said: “It has been a very difficult battle. But we are following a very long-term approach and it helps us to prioritize which products are the most important, which components we have.” Purdy says Huawei finally wants to be able to work with Google again. And as for that, it’s up to President Joe Biden to lift the restrictions on Huawei.
