China’s Huawei surpasses Apple in smartphone sales

Despite Apple’s big rally on Wednesday after a strong third-quarter report, with shares hitting the $200 mark and the company inching closer to becoming the first trillion-dollar company, the tech giant is losing its sales luster to a Chinese smartphone maker.

Shenzhen-based Huawei has officially surpassed Apple in smartphone sales last quarter, making it the world’s second-largest vendor behind South Korea’s Samsung, according to research firms IDC, Canalys and IHS Markit.

According to Canalys’ data, Huawei shipped 54.2 million handsets last quarter, which is up 41% year-over-year. The firm said the uptick is partly due to its strong sales of its latest flagship phone, the P20, and its Honor sub-brand model, which accounted for two thirds of its $16 million revenue jump in the last quarter.

“Samsung remained the top vendor in Q2, but felt the impact of Huawei and others, slipping 8% to 73 million shipments. Apple fell to third, shipping 41 million iPhones, a 1% year-on-year growth,” the Singapore-based research firm said.

In IDC’s latest report, the firm said that while the overall market shrank by 1.8% in the second quarter, the biggest surprise by far was that Huawei now has a 15.8% market share with its 54.2 million smartphone shipment in the quarter.

"The continued growth of Huawei is impressive, to say the least, as is its ability to move into markets where, until recently, the brand was largely unknown," Ryan Reith, program vice president with IDC's Worldwide Mobile Device Trackers, said.

But Reith adds that it is worth noting that, “Apple moved into the top position each of the last two holiday quarters following its product refresh, so it's likely we'll see continued movement among the top-ranked companies in 2018 and beyond,” he said.

While Huawei has leaped into second place, the Chinese smartphone and telecom maker has struggled to gain traction in the U.S. due to concerns that its technology could be used by the Chinese government to gather intelligence. However, the company has repeatedly denied that its products pose any security risks.

In January, Huawei failed to clinch a smartphone deal with AT&T to start selling its smartphones in the U.S., according to the Wall Street Journal.  After the deal fell through, Huawei’s head of consumer business told the South China Morning Post that, “we have been harmed again.”