Huawei Overtaking Samsung as Top Phonemaker 'Wouldn't Have Happened' Without COVID-19 Pandemic, Analyst Says

Huawei shipping more smartphones than Samsung for the first time ever "wouldn't have happened" without COVID-19, analysts say.

Ben Stanton, who leads global smartphone content at Canalys, the market research firm behind the headline-grabbing statistic being widely-reported Thursday, said that despite it being the first quarter in nine years a company other than Samsung or Apple has led the market, there are some significant caveats to the results released today.

To recap: Canalys tracking data showed that Chinese technology Huawei shipped more phones worldwide than any other vendor, for the first time, in Q2 2020.

Despite remaining on a U.S. trade blacklist and being restricted from using full Google services, Huawei managed to ship 55.8 million devices in the quarter, managing to beat Samsung, which shipped 53.7 million smartphones over the same period.

While Huawei shipments were down 5 percent year-on-year, stats suggested shipments from South Korea's Samsung plunged by 30 percent compared to Q2 2019.

It's very much a PR-win for Huawei, but analysts said the global situation remains fluid due to the coronavirus pandemic, and the crown may not be worn for long.

"This is a remarkable result that few people would have predicted a year ago," Stanton said in a statement. "If it wasn't for COVID-19, it wouldn't have happened."

He added: "Huawei has taken full advantage of the Chinese economic recovery to reignite its smartphone business. Samsung has a very small presence in China, with less than one percent market share, and has seen its core markets, such as Brazil, India, the United States and Europe, ravaged by outbreaks and subsequent lockdowns."

The analysts noted Huawei is still bound by U.S. restrictions that have "stifled" business outside of mainland China. Indeed, its overseas shipments fell 27 percent in Q2.

Meanwhile, its domestic market grew in the quarter, likely aided by China's reopening after COVID-19 hit, as other regions of the world continue to battle outbreaks.

Chinese shipments spiked by eight percent in Q2. According to Canalys, the company now sells more than 70 percent of its smartphones in mainland China.

Canalys analyst Mo Jia suggested the win for Huawei is likely to be short term, saying: "Taking first place is very important for Huawei. It is desperate to showcase its brand strength to domestic consumers, component suppliers and developers."

"It... will broadcast the message of its success far and wide in the coming months. But it will be hard for Huawei to maintain its lead in the long term. Its major channel partners in key regions... are increasingly wary of ranging Huawei devices, taking on fewer models, and bringing in new brands to reduce risk. Strength in China alone will not be enough to sustain Huawei at the top once the global economy starts to recover."

For its part, Samsung said in its Q2 financial results, released today, that it forecasts a "gradual recovery" for consumer devices in the remainder of the year.

The rival tech company said: "Quarterly operating profit rose 26 percent from the previous quarter and 23 percent from a year earlier, thanks to firm demand for memory chips and appliances, as well as a one-off gain at its Display Panel Business.

"A partial recovery in global demand since May also helped offset some COVID-19 effects, resulting in higher earnings than initially expected.

"Revenue in the quarter fell 4 percent from the previous quarter and 6 percent from a year earlier due to reduced sales of smartphones and other devices."

The report added: "Looking ahead to the second half of 2020, Samsung... expects a gradual recovery in demand for mobile devices and consumer electronics."

A Huawei spokesperson told The Verge: "Amidst a period of unprecedented global economic slowdown and challenges we've continued to grow and further our leadership position by providing innovative products and experience to consumers."

Visitors check out new Huawei smartphones at the 2019 IFA home electronics and appliances trade fair on September 06, 2019 in Berlin. Sean Gallup/Getty

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