SamMobile has affiliate and sponsored partnerships. If you buy something through one of these links, we may earn a commission.

Notifications
    News for you

    Despite sanctions workaround, Huawei can’t go after Samsung yet

    Opinion
    By 

    Last updated: November 16th, 2023 at 12:09 UTC+01:00

    There was a time when it seemed like Huawei would overtake Samsung as the world's leading smartphone vendor. The company enjoyed incredible support in its home country of China, a market where Samsung's share is so low that it could just exit altogether and no one would notice. It was also aggressively competing against Samsung across all segments in major markets across the globe.

    The United States was one of the only major markets where Samsung had a bit of breathing room as Huawei phones weren't widely available there. However, Samsung's biggest threat in the US has always been Apple, so it's not like Huawei's absence meant smooth sailing for the Korean giant in the United States. It was Huawei's misfortune, and Samsung's good luck, that as soon as the Chinese conglomerate got close to launching its phones in the US, it was effectively banned from the market.

    The US administration placed crippling sanctions on Huawei, making it almost impossible for the company to source parts, chipsets, components, and even software from US companies. This was also a setback for the expansion of Huawei's 5G smartphone lineup as it could no longer buy those chips from companies based in the US or those that made chips using US-sourced equipment.

    Despite all of this pressure, it hasn't given up, and it was clear at MWC 2023 that Huawei is far from dead. It also took the industry by surprise this year with the launch of the Huawei Mate 60 Pro. This 5G-compatible phone uses advanced chips made in China so it's not hit by those sanctions. Much has remained secret about this device's Kirin 9000s processor and the parts provisioning done for it by the chipmaker Semiconductor Manufacturing International Co (SMIC).

    Huawei is seeing incredible demand for the Mate 60 and Mate 60 Pro 5G in China. Canalys reports that sales for the devices have crossed 2.4 million units since the launch in August with the Mate 60 Pro accounting for over 60% of orders. There's so much demand for the handset now that the company is struggling to provide adequate supplies. Counterpoint Research senior analyst Wang Yang added that “Production capacity can’t meet demand,” and that Huawei is now having to implement a pre-order system.

    It's unusual for a pre-order system to be implemented for a device that's already been released, but that's what the situation requires now. Huawei has launched a pre-order program for the Mote 60 Pro, promising delivery within a 90-day period for customers who place orders through its official website. Customers can only buy one unit each and their order will be shipped in a random sequence. Some customers who have placed orders say their delivery ranges as far out as February 2024.

    The delay in supply isn't just because Huawei can't get the chipsets fast enough. Other component manufacturers are also having to increase recruitment of assembly line workers to meet Huawei's growing demand for the Mate 60 Pro's components. Foxconn is now reportedly paying workers more to make Huawei phones than it does for iPhones. It's evident that the struggles Huawei has been facing for the past few years have reverberated across its entire supply chain. That's not something the company can immediately recover from.

    It's important to note here that this is Huawei struggling to meet the demand in China only. If these devices were to be launched globally, it seems impossible that the company will be able to supply several million additional units. By the time it gets around to doing that, it would be time to launch the Mate 60 Pro's successor anyway. This goes to show that even as Huawei plots a return to the US phone market through a 5G loophole, it's still far from making Samsung lose any sleep.

    As things stand for Huawei, it simply can't generate the kind of volume that it needs to match Samsung's bombardment of the market. There continue to be significant geopolitical challenges for Huawei as well so the path to its US return is far from straight. Let's not forget that Huawei is also cut off from Google Play Services. Its phones won't be able to access the Play Store and Google services on devices powered by Android. Huawei's homegrown OS is the workaround, but good luck getting customers in the US to jump on that.

    Perhaps Huawei will take the simpler approach and look to compete against Samsung elsewhere, particularly in emerging markets, where customers are a lot more price conscious and wouldn't be as apprehensive about using Huawei's operating system over Android. Even for that to happen, the kind of support that Huawei needs from the supply chain simply doesn't exist at this point in time.

    That's not to say it's not being developed. It's evident that chipmakers and other component manufacturers in China are rapidly expanding their capability and capacity to hedge against the geopolitical headwinds that China will continue to face. So even if Huawei isn't an immediate threat to Samsung, it can't be disregarded and the Korean giant simply can't afford to take its eye off what Huawei is doing.

    If anything, these restrictions have given Chinese OEMs the impetus to quickly bring new technologies to market. They're milking the opportunity to showcase new innovations while incumbent players like Samsung grapple with industry inertia. That's why we gave our humble suggestion to TM Roh, head of Samsung's mobile division, to adopt a policy of shock and awe.

    This is a case of objects in the mirror being closer than they appear. Samsung may feel that Huawei is still quite a bit further in the rear view mirror, but it's actually at the cusp of breaking the shackles that have held it back over the past few years. So even if it's in no position to go after Samsung right now, there's no doubt that it will be back to challenging the world's largest smartphone vendor in a few year's time. You never know, geopolitical winds can shift and lead to relaxations that further reduce that time, so it's only in Samsung's best interest to keep a close eye on what its old rival is up to.

    Opinion ChinaHuawei

    You might also like

    Sales of Samsung’s foldable phones have nosedived in China

    Sales of Samsung’s foldable phones have nosedived in China

    Samsung was one of the first companies to release foldable phones at scale. That provided the company with a significant first-mover advantage. It was able to establish dominance in key markets early on, particularly in China, where local manufacturers would need a couple of years to catch up. Having reaped the benefits, Samsung is now […]

    • By Adnan Farooqui
    • 2 weeks ago
    Samsung gets best League of Legends team to promote Odyssey gaming monitors

    Samsung gets best League of Legends team to promote Odyssey gaming monitors

    Samsung's Odyssey lineup of gaming monitors is highly regarded by gamers across the globe. The company improved the series with new additions this year that were unveiled during the Consumer Electronics Show in Las Vegas back in January. The company has roped in T1, the best League of Legends team, to promote its Odyssey gaming […]

    • By Adnan Farooqui
    • 2 weeks ago
    Top-level visits underway as Samsung seeks turnaround in China

    Top-level visits underway as Samsung seeks turnaround in China

    China is an important market and while Samsung once enjoyed a considerable share in the country's smartphone market, it has since fallen to 0%. The company needs to do a lot more than just launch basic phones to revive its fortunes in the lucrative market. Samsung has set up a dedicated team to pursue a […]

    • By Adnan Farooqui
    • 3 weeks ago
    I hope Samsung’s efforts to reverse 0% share in China go beyond a basic phone

    I hope Samsung’s efforts to reverse 0% share in China go beyond a basic phone

    Samsung's mobile business may be thriving in a lot of markets but there's one market where it has completely been wiped out by the competition: China. Nevermind the fact that it's one of the world's most lucrative markets for smartphones or that it's a country of more than a billion people. Few markets provide the […]

    • By Adnan Farooqui
    • 3 weeks ago
    54 Samsung business sites went lights out for 10 minutes yesterday

    54 Samsung business sites went lights out for 10 minutes yesterday

    Earth Day is an annual event aimed at supporting environmental causes and raising awareness of issues that threaten our planet's natural balance. Every year, on April 22, Earth Day supporters, from individuals to big businesses, show their commitment to the cause by flipping light switches off for an hour to reduce energy consumption and carbon […]

    • By Mihai Matei
    • 3 weeks ago
    This Galaxy mid-range phone has leather back and Snapdragon chip

    This Galaxy mid-range phone has leather back and Snapdragon chip

    Samsung has done something interesting after a long time. It has launched a mid-range smartphone with a leather back. The Galaxy C55 is a variant of the Galaxy M55 that was launched in Brazil and India a few weeks ago, but it has its own character in terms of look and feel. Galaxy C55 launched […]

    • By Asif Iqbal Shaik
    • 3 weeks ago