Huawei Success Threatens iPhone Sales

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By Douglas A. McIntyre Published
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Despite the success of smartphone sales, as is true with almost any other business, there are only so many customers to go around. Apple Inc. (NASDAQ: AAPL) and Samsung have barely seen their positions at the top of the smartphone industry challenged. A Chinese company has started to change that. Huawei announced its smartphone sales rose 62% in the first half.

As a part of the disclosure about its results, Huawei reported:

Huawei, a leading global information and communications technology (ICT) solutions provider, today announced the business performance of its Consumer Business Group (BG) for the first half of 2014. During this period, Huawei shipped a total of 64.21 million devices. Smartphones accounted for 34.27 million units, showing an impressive year-on-year increase of 62%.

Apple’s lead is still considerable. For the past quarter, Apple said iPhone sales were 35.2 billion. However, that was a sequential drop of 19% from the previous quarter. Apple’s lead should be made much larger by the launch of the iPhone 6.

However, Huawei’s success is in several markets in which Apple has not done as well. Huawei’s management reported:

Huawei’s performance over the past six months was fuelled largely by the tremendous growth in overseas markets where Huawei intensified global marketing initiatives. In Q2 2014 alone, Huawei shipped a total of 20.56 million smartphones to markets in Asia, Latin America, the Middle East and Africa, an increase of 85% compared to last year. Huawei’s commitment to branding efforts in these markets contributed to the impressive shipment growth results of 550% in the Middle East and Africa, 275% in Latin America, 180% in Asia-Pacific and 120% in Europe. Huawei also held majority smartphone market share in selected markets in Asia and Latin America.

According to IDC, in the fourth quarter of 2014, Huawei had a China market share of 10% to Apple’s 7%. This critical market is already crowded with leaders Samsung and Lenovo taking 32%.

Not long ago, many analysts assumed that Apple would never have a major challenger in the smartphone market. Samsung changed that. Now several smaller companies want to change it more. At or near the head of this pack is Huawei.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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