Huawei’s misfortunes are a blessing to Samsung

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The trade war between the US government and China has put Huawei in trouble.  And the biggest beneficiary of this trade war is Samsung. The demand for Samsung Galaxy phones has risen while the demand for phones from the biggest Chinese phone maker has dropped.  There is no doubt that Samsung will continue to maintain its position as the market leader. Huawei, which is Samsung’s top threat, has been highly disadvantaged by the disagreements between Washington and Beijing.

Furthermore, Samsung has released a good number of budget phones in 2019. Some have different names but seem to have almost the same specifications. Samsung is taking the fight to the doorsteps of its Chinese rivals.

We recently learned from a report by IDC that Samsung had lost a big chunk of its market share to Chinese phone makers. The Korean tech giant has been facing stiff competition from Huawei, Xiaomi and Oppo. These brands have dominated the budget market in different places across the world over the past few years. However, things started changing after Samsung introduced new budget phones.

These phones are featured in the Galaxy A and Galaxy M series. These phones have attractive features and are priced competitively.  Samsung’s strategy seems to be working so far. According to LURAM, Samsung Galaxy A50 and the and the Galaxy A30 have very high demand. Their demand is higher than the demand for similarly priced phones from competing brands.

Before the Trump government ban, Huawei had a shot at becoming the top smartphone manufacturer in the world. This was further fueled by Samsung’s missteps. For example, it failed to release the world’s first foldable phone as scheduled because of problems with the folding mechanism.

The White House directive means that US companies cannot trade with the Chinese technology giant without seeking permission from the US Commercial Department.  Companies like Google can’t trade with Huawei anymore unless the ban is lifted.  This means that future Huawei phones will not use the Android Operating system. This is a very big blow to the biggest Chinese phone maker since all its smartphones are powered by Android. Furthermore, Huawei is heavily dependent on technology developed in the United States. If an agreement is not reached soon, the ban will no doubt have far-reaching implications on Huawei.

Huawei’s New Operating System

It seems Huawei saw this coming and started developing its OS.  The company claims that its new operating system will be ready by 2020.  However, there is a high likelihood that consumers will not be willing to ditch Android for a new operating system they have not tested.  It will be very difficult for Android lovers to switch to phones with an operating system that does not have Google Maps, Gmail and other popular apps.

Data from the International Data Corporation showed that Samsung had a 23.1% smartphone market share in the first quarter of 2019.  This was an 8.1 percent drop compared to the first quarter of 2019. Huawei, on the other hand, enjoyed a 50% year over year increase to claim 19% share of the global smartphone market in the first quarter of 2019.

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