Recently, there are rumors that at a recent huawei internal meeting, Huawei’s consumer business CEO Yu Chengdong revealed that Huawei’s mobile phone shipments this year will be about 230 million units. That’s a full-year target set and is likely to surpass Apple’s full-year sales. In fact, huawei’s handset sales exceeded 200 million units by October 22, 64 days ahead of 2018. But while Huawei is likely to overtake Apple in full-year sales in 2019, it is still outof the other rivals, including Huawei, in terms of profits.
Even so, Apple accounts for 66% of the global smartphone industry’s profits and 32% of its total mobile phone revenue, dominating revenue and profits in the global mobile phone market, largely because of its loyal high-end user base in major markets such as the U.S., the European Union and Japan. That’s one reason Apple can still operate at the level of profit situated by its rivals; Samsung ranks second in the global smartphone industry, accounting for 17 percent of the industry’s profits, including the galaxy A-series portfolio and the Galaxy Note. The active launch of the 10 Series is the main driver of growth, and Huawei Q3 ranks third in the global smartphone industry profit list.
While Chinese manufacturers have performed well in the global smartphone market in recent years, the Counterpoint Research report notes that margins for Chinese smartphone brands remain low, but better than in previous years. Chinese smartphone brands, which attract users at low prices and launch a full-featured flagship product, have also penetrated into the high-end price range, but Apple has cut the price of some iPhones because of the longer user cycle, posing a challenge for some Chinese smartphone brands to increase profits and raise prices.
Counterpoint Research also noted that the adoption of 5G will drive some hardware upgrades in the coming quarters, which will boost revenue growth for handset makers, who are already ready for full commercialization of 5G. In China, for example, Huawei, OPPO, Vivo, Xiaomi, etc. will benefit from the promotion of 5G and use the opportunity to raise their average selling price. While revenue may increase, material hardware costs will also rise, so margins may not increase as much as they can.