China’s developing smartphone market has been incredibly competitive, with brands such as Huawei, Oppo, Xiaomi, Vivo, and Lenovo earning places in the top 10 global smartphone sales. Chinese smartphone developers have overtaken device manufacturers popular in the west, such as Samsung and Apple, by focusing on Asian and Eastern markets. Xiaomi, for example, is reportedly opening 20,000 factory jobs in India by 2020.
Oppo had briefly taken the #1 position in China thanks to an advertising campaign that featured well-known celebrities around the globe, but this seems to have only been a temporary effect. While Oppo managed an annual growth of 55% and shipped 20 million units, a recent Canalys report notes that Huawei shipped around 21 million units, which equates to 18% of the total market in China.
Oppo dropped to the #2 spot while Vivo bumped up to #3, with 17 million units shipped, or 15% total market share in China. Xiaomi has fallen behind to #4, but this isn’t entirely bad news for Xiaomi – their focus has been manufacturing high-performance devices with the latest technology, at a fraction of the cost to consumers than other manufacturers.
Xiaomi’s latest flagship Xiaomi Mi 6 for example is reportedly better in terms of hardware specs than the latest Samsung Galaxy S8, yet costs half the price. They are intentionally foregoing profits in favor of building brand-name recognition and consumer loyalty. As Xiaomi’s global Vice President Hugo Barra puts it, “We could sell 10 billion smartphones and we wouldn’t make a single dime in profits. Basically we’re giving them to you without making any money… we care about the recurring revenue streams over many years.”
Huawei on the other hand is charging premium prices for premium phones, but building important international relationships along the way. For example, Google and Huawei teamed up to design the Huawei Nexus 6P smartphone, which has been hailed as one of the best smartphones available on the market.
Huawei also recently designed the new HiKey 960 board for Android phones, which is a blazing fast Raspberry Pi-like board that could be the future of Android hardware technology for many manufacturers.
Despite Huawei’s massive success, it has recently come under investigation from the United States Treasury Department’s Office of Foreign Assets Control. In a nutshell, U.S. officials are inquiring into whether or not Huawei has broken American trade controls on embargo countries such as Cuba, Iran, Sudan, and Syria. A subpoena sent to Huawei from U.S. officials demanded information about Huawei’s exports of American technology to the aforementioned countries.
Though Huawei has not officially been accused of any wrong-doing, it comes at a particularly peculiar time, as U.S. President’s Trump administration has been urging China to cut back on trade.
Huawei released the following statement in response to the subpoena: “Huawei has adhered to international conventions and all applicable laws and regulations where it operates. This is the cornerstone of global operational compliance at Huawei, and is a long-standing core value followed by Huawei’s management team.”
If Huawei were accused of violating U.S. trade laws, their access to components manufactured by American companies could be cut off. This would have an effect not only on Huawei, but on the global market, as Huawei is one of the two largest smartphone manufacturers in the world. This investigation into Huawei may be lacking substance, and rather be a way for U.S. officials to try and stem the rise of Chinese technology making its way overseas, as Huawei is certainly in a position to become the #1 smartphone manufacturer not only in China, but globally as well (this statement is only the author’s personal opinion).