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In 2019, the US placed Huawei in the list of entities. Why? The Trump administration viewed Huawei as a threat to the national security of the United States due to its alleged ties to the Chinese communist government. Some also pointed out that Huawei had recently surpassed Apple as the world’s second-largest smartphone maker and wondered if that had something to do with the US action. Some might argue that in some way putting Huawei on the entity list might have backfired, as it excluded the company from its US supply chain. And those companies had made $ 18 billion from Huawei on last year.
Huawei has been replaced as the main smartphone brand in China
The Trump administration might have thought it had sunk Huawei’s battleship by forcing it to replace the Google-licensed version of Android with the open-source version. But early last year, Huawei had briefly seized the top spot to become the world’s largest smartphone maker for a month. That forced the Trump administration to take the next step. The Commerce Department strengthened an export rule that now prevents foundries from delivering state-of-the-art chips made with American technology to Huawei without a license.
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For the first time, Oppo is the main smartphone brand in China
Announced exactly one year to the day as the location of the entity list, this was the last straw. It prevented Huawei, at the time the TSMC contract foundry’s second-largest customer (behind Apple), from receiving the chips that power its flagship phones. And TSMC had just started producing Huawei’s most technologically advanced 5nm chip, the Kirin 9000; That component went into the sequel to Huawei’s foldable phone alongside the latest versions of its flagship phones. Where placement on the entity list could have failed, the chip shipping ban was a major blow as far as the Trump administration is concerned. The move forced Huawei to sell its Honor sub-brand for $ 15 billion, a cunning move by the Chinese manufacturer since it took Honor out of Huawei’s orbit and prevented US restrictions from affecting it.
Counterpoint estimates that Oppo had 21% of the Chinese smartphone market in January, with Vivo’s 20% share in second place. Huawei, Apple and Xiaomi are stuck at 16%. Varun Mishra, Senior Analyst at Counterpoint Research, explained how Oppo rose to the top in China. “Oppo has been able to successfully reposition its product lines in 2020,” said Mishra. “The rebranding of the Reno series and the launch of a more capable device at a lower price than its predecessor helped Oppo capture the affordable premium segment. The strong momentum of the A series in the mid-range strengthened the portfolio of Oppo products and was able to meet the demand for 5G in China in a wide price band. This was further helped by Huawei’s decline. “
The scary part for Huawei is that the US ban will soon leave it out of 5G component inventory. Considering that more than 65% of the devices sold in China during the fourth quarter of 2020 supported 5G, Huawei faces serious problems ahead. The company has tried to keep an optimistic view and its homegrown HarmonyOS will make its smartphone debut on the Mate X2. But the actual mood within the company could be described as bleak, at least for the moment. Tom Purdy, director of security for Huawei USA, said: “It has been a very difficult fight. But we are taking a very long-term approach and it is helping us prioritize which products are most important, what components we have.” Purdy says Huawei would like to eventually be able to work with Google again. And when it comes to that, it will be up to President Joe Biden to remove restrictions on Huawei.
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