Huawei’s problems have given new players the chance to work their way up in the smartphone market. Who will be the challenger of Samsung and Apple?
At the end of each quarter, the market analysis firm Counterpoint Research publishes the most recent market share figures of the global smartphone industry. These market figures reflect the relationships in the sector and show which brands are doing well and which are not doing so well. On April 30, the agency released the figures for the first quarter of 2021, which ended April 1. How will the global smartphone market evolve in 2021?
First of all Samsung by 22%. The South Korean manufacturer has been the established number one for several years, although they had to do another leapfrog at Apple this quarter (which closed strongly with the iPhone 12 2020) to conquer that leading position. The smartphone industry seems more than ever an old-fashioned battle between Samsung and this year Apple to be. But the most interesting evolution actually takes place in the shadow of the two tenors. There are many brands competing for the title of ‘best of the rest’ and to become the new challenger of the two superpowers. Who can threaten Samsung and Apple in the coming years?
The Icarus flight from Huawei
Not long ago, Huawei took on the role of third dog. The Chinese company, founded in 1987 by one Ren Zhengfei, actually started out as a provider of telecommunications services; still an important branch of the company today. Since 2007, Huawei has also started to focus more on producing consumer goods such as smartphones, tablets and laptops. Huawei set itself as a price breaker in the market to compete with the more established brands.
The company quickly gained popularity in China, but a breakthrough in Europe and the US initially proved more difficult. Western consumers were somewhat suspicious of the quality of this cheap Chinese technology. That started to change from 2014. Huawei saw an opportunity in the negative response to Apple iPhone’s 6 to launch the Mate 7 globally. This became one of the first Huawei smartphones with which European and American consumers came into contact. The momentum had set in for Huawei and the brand symbolized a new generation of ‘hip’ (Chinese) technology companies. Huawei was leapfrogging Apple and analysts predicted Samsung’s hegemony could end.
In 2019, the popularity of Huawei was at its peak. But just then fate struck. You probably know the company’s recent history. On May 15, 2019, President Donald Trump issues a trade ban against Huawei. This comes after rumors that the company’s network technology could be misused by the Chinese government for espionage. In addition to the network department, the measures are hitting smartphone sales extremely hard. The exile from the Google ecosystem makes smartphones a lot less attractive to European consumers. The consequences were still limited at the beginning of 2020, Huawei was even at the top in the summer, but now the company has to face the painful reality. In barely three quarters, the market share has dropped from 20% to 4%. Huawei itself seems to realize that the tide will not turn soon and has already started to phase out the smartphone department.
A Chinese battle
One’s dead is the other’s bread. It is an age-old saying that is still very relevant in the smartphone market. The decline of the Huawei brand has paved the way for new players to amass bits of market share. Those new players in the European are also coming over from China, just like Huawei. At the moment we see in third place Xiaomi stand with a global market share of 14% (in Europe even 18%). Xiaomi is still a very young company; it was only founded in 2010 by Lei Jun and Lin Bin. In 2011 they designed their first smartphone. It’s actually almost only gone up for Xiaomi since its inception. After a few years they were already one of the biggest brands in their home country and conquering foreign markets seemed to be hardly difficult for the company. The Mi4 released in 2014 was the company’s first global success. In addition to the low pricing of the products, Xiaomi has developed a strong e-commerce strategy where they manage to perfectly balance supply and demand.
But Xiaomi must also tolerate competition within its category. OPPO is one of those other Chinese smartphone manufacturers that is conquering the world. The company has been active in the market since 2008; in its early years, the company focused on audiovisual products. OPPO has taken longer to make the leap to Europe than Xiaomi; that only happened with the launch of the Find X flagship range. In fact, the brand has only been available from Belgian retailers since last year. As a result, there is currently a large awareness gap between Xiaomi and OPPO in Europe, but overall the differences are much less small. In the homeland of China, OPPO is more than Xiaomi as the successor to Huawei.
OnePlus: a dangerous outsider?
In the margins of Xiaomi and OPPO, many Chinese brands are still on the rise. Names like Vivo and Realme are not so well known to us, but the name OnePlus might ring a bell for you. OnePlus has always been an outsider in the industry. Pete Lau founded the company in 2013 with one mission: to create a ‘flagship killer’. The smartphones were known to bring flagship specifications to the budget-friendly classes and were often very exclusively available.
In recent years, OnePlus has been working a lot more commercially, which has made significant growth possible. The market share fluctuates around 2%, but with the OnePlus 9 the company is one of the fastest growing brands. Is OnePlus still going to be the flagship killer they promised to be? Maybe not. OnePlus plays in the same league as OPPO; both companies are under the roof of a Chinese consortium called BBK Elektronics. OPPO is even one of the main shareholders of OnePlus, which outlines the balance of power within the portfolio. BBK Elektronics allows healthy competition among its own brands, but it should not be the intention for them to compete against each other. It is therefore especially with OPPO that BBK has opened the attack on established values.
Xiaomi of OPPO?
The battle for the throne of Huawei is therefore between Xiaomi and OPPO. At this point, we have to say that Xiaomi has the best cards to become Samsung and Apple’s new challenger, but the situation could soon reverse. The rise of both brands shows many parallels with how Huawei has climbed to the top. Hopefully they will not face the same fate. In any case, Samsung and Apple know that competition is on the way.