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article imageSamsung and Apple phones lose ground to Huawei due to high prices

By Ken Hanly     Feb 22, 2019 in Technology
Market research by tech firm Gartner shows Huawei's share of the smartphone market rose to almost 15 percent during the three months ending in December of 2018. This is a gain of 4 percentage points from the same period in 2017
Huawei's gain may be due to higher price tags on competitors' phones
A recent article suggests that Samsung and Apple are losing market share due to the high price tags they are putting on their new premium models. The new Samsung Galaxy Foldable has the huge starting price of $1,980 as reported in a recent Digital Journal article.
Samsung at 17 percent and Apple at 16 per cent approximately still are first and second in terms of smart phone market share. However, at 15 percent Huawei is nipping at their heels. Both are also losing share in the fourth quarter compared to the same time period the previous quarter. Apple lost two percentage points and Samsung about one.
Apple sold only 64.5 million iPhone units in the fourth quarter of last year Gartner estimates. This is down almost 12 per cent from the same time period in 2017. This is Apple's worst quarterly year-on-year decline since the first quarter of 2016.
Chinese phones adding features at low prices
Anshul Gupta, senior research director at Gartner said in an interview: "Apple has really been losing ground on a couple of things, especially when it comes to emerging markets like Greater China, What we are seeing in China is that the leading Chinese players have raised the quality of their smartphones significantly."
Apple cites reasons for sales decline
Apple admitted that lagging sales were mainly due to poor performance in China. However Apple CEO Tim Cook said that customers were also holding on to their iPhones longer than in the past. Also economic factors particularly in emerging markets have dampened consumer demand.
Apple and Samsung not keeping with Chinese cheaper technology
Gupta explains why Chinese technology improvements are hurting Samsung and Apple's sales: "When you look at the flagship smartphones from Huawei, or from Oppo and Vivo, they have features that one can find in the flagship smartphones of Samsung and Apple, but at the same time the prices are quite low." Gartner claims that both Apple's iPhone and Samsung's Galaxy line are showing only marginal and incremental improvements. As these phones cost roughly $1,000, consumers are buying Huawei and other Chinese brands that now sport similar features. As the top Chinese brands gain visibility in international markets the Chinese are beginning to take more pride in using models made in China.
Huawei's security problems in the US and elsewhere
US officials in particular have raised concerns over the potential of Huawei's telecommunications equipment to be used for spying purposes by the Chinese intelligence services. US and some allies have been banning Huawei from access to their next generation 5G mobile networks. Also, Huawei's Chief Financial Officer (CFO) Meng Wanzhou was arrested in late 2018 in Canada at the request of the US who want her extradited to face charges of committing bank and wire fraud to violate sanctions on Iran. Meng is the daughter of Ren Zhenggei the founder of Huawei.
Huawei denies Washington's claims and Ren has described the arrest of his daughter as politically motivated. Gupta claims the arrest and bad press has had little effect on the company's global smartphone sales. He said: "They don't have much business coming from the U.S., especially when it comes to devices," he said. "Their volume has been almost negligible in that market."
Huawei's denial that it is involved with Chinese intelligence is reported in a recent Digital Journal article. The appended video is from March of last year.
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