Sanctions reality bites Huawei with plunging smartphone sales

Huawei has been dogged by US sanctions for nearly two years now. PHOTO: REUTERS

(CAIXIN GLOBAL) - The bad news keeps coming for sanction-hobbled Huawei.

IDC has just released its latest quarterly smartphone results and they show that the embattled telecom giant's smartphone sales plunged by nearly half - or 42.4 per cent to be exact - in last year's fourth quarter from a year earlier.

That makes Huawei the world's fifth biggest brand for the period, a far cry from just two quarters earlier when it was at the top of the heap.

Huawei has been dogged by US sanctions for nearly two years now, as Washington aims to limit the company's role in the worldwide development of state-of-the-art 5G smartphones and networking equipment.

First, the US banned American companies from selling components and software to Huawei. And last year it turned up the pressure by leaning on some of Huawei's key non-American suppliers to abandon the company as well.

That has left Huawei with a limited supply of chips and other key components that have hurt its ability to make smartphones, forcing it to rely on stockpiles built up before the sanctions took effect.

Meantime, Huawei's pain has been Apple and Xiaomi's gain. The iPhone maker's smartphone shipments surged 22.2 per cent year on year in the quarter, enough to lift it past Samsung for the smartphone crown, as it shipped 90.1 million iPhones - a record for a single vendor in a single quarter. And Xiaomi's shipments rose by an even stronger 32 per cent, giving it 11.2 per cent of the global smartphone market.

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