Huawei ban: Winners, losers, and what's at stake (a whole lot) Watch Now

Huawei doesn't sell many phones to US consumers, but it has dominated its home territory for the past two years and is gradually squeezing out Apple's iPhone.

China, once a growth engine for iPhone sales and home to much of its assembly line, is all gloom and doom for Apple these days.

Investor analysts have warned that a Chinese government retaliation to the ban on US companies supplying Huawei could reduce Apple's global profits by a third. That warning follows the pre-ban dip in iPhone sales Apple reported as it stopped disclosing iPhone sales volumes this year.

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The big winner from the tumultuous US-China trade relations, at least on the Chinese side, is none other than Huawei. The company's smartphones already outrank Apple globally by marketshare and the Chinese tech giant is now totally crushing Apple in its home market.

Analyst Canalys reports Huawei smartphone shipments were up 31% year over year in Q2 2019, despite overall shipments continuing a nine-quarter decline.

Shipments were down overall in China by 6% compared with last year, totaling 97.6 million units. Huawei's local rivals also saw shipments slide dramatically. Oppo and sister brand Vivo were down 18% and 19%, respectively, while Xiaomi was down 20%. Apple iPhone shipments were down 14% year over year, totaling just 5.7 million units.

Huawei has said the company has seen revenues fall by $30bn due to the trade war between China and the US. But its home market is picking up part of the slack with patriotic purchases, with sales in the country now accounting for 64% of its smartphone shipments – the highest share China has represented since 2013.

"Huawei's addition to the United States Entity List caused uncertainty overseas, but in China it has kept its foot on the accelerator," said Canalys analyst Mo Jia.

The company is attracting customers from Oppo and Vivo, while at the same time increasing spending on local marketing.

"But the US-China trade war is also creating new opportunities. Huawei's retail partners are rolling out advertisements to link Huawei with being the patriotic choice, to appeal to a growing demographic of Chinese consumers willing to take political factors into account when making a purchase decision," said Jia.

Huawei is also well positioned to exploit Chinese carriers' shift towards 5G.

The Department of Commerce added Huawei to its 'Entity List' in May, prompting Android-maker Google, and chipmaker Arm to cut supplies to the Chinese network and smartphone giant. US companies can apply for licenses to trade with Huawei, but obstacles remain in place.

Huawei now holds a 38.2% share of China's smartphone shipments, which is up from 27.6% this time last year and now well ahead of all other rivals. Oppo and Vivo have shares of 18.3% and 17.5%, respectively, while Xiaomi holds 11.8%, and Apple has 5.8%.

Image: Canalys

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