China’s smartphone market slumped in the year’s third quarter; analysts say.
Canalys called a 15 percent annual slump before the quarter was even over! IDC waited another week, until November 6th, to reveal its calculations of a 14.3 percent year-on-year fall in handset shipments.
Both analyst firms agreed that one reason for the dip was US sanctions on Huawei have started to bite.
"The escalated US trade restrictions in August ultimately impeded Huawei's momentum in its home market,” said Will Wong, research manager for client services at IDC Asia/Pacific. IDC added that Huawei “cautiously managed its shipments across its product lineups and lowered the production of some popular models like the Mate 30 series.”
Those actions “resulted in a supply shortage in the lower-tier cities, delaying purchases from loyal customers.”
Canalys analyst Mo Jia offered a similar explanation, saying : “Huawei was forced to restrict its smartphone shipments following the 17 August US sanctions which caused a void in channels in Q3 that its peers were not equipped to fill.”
Other Chinese handset-makers weren’t immune to the same supply chain pressures that made life hard for Huawei. Even Apple suffered, but pandemic-related delays to the debut of the iPhone 12 were the source of its woes.
Both firms therefore believe there’s every chance this quarter will improve on Q3’s shipment tally, which IDC reckons hit 84.8m and Canalys pegged at 83m. Both firms found only Xiaomi managed to increase its output during the quarter.
5G is expected to be the driver of new purchases, with the iPhone 12 and Huawei Mate 40 giving buyers new options and signs that the new networking protocol was a big reason behind Q3 purchases. IDC said 5G handsets accounted for 49.7m of Q3’s 84.8m buys.
While Huawei dominated 5G sales, Canalys’ Mo Jia said the company has interesting times ahead.
“Huawei is facing its most serious challenge since taking the lead in 2016,” he said. “If the position of the US administration does not change, Huawei will attempt to pivot its business strategy, to focus on building the Hongmeng OS and software eco-system, as the Chinese government is eager to nurture home-grown alternatives to global platforms.” ®