Chinese tech giant Huawei is planning to produce around 50 million units of smartphones in 2021, TheElec has learned.
This will be a drop of 74% from the company’s expected shipment for 2020.
Huawei shared this 2021 target with its South Korean subcontractors, people with direct knowledge of the matter said.
The company in 2019 moved 240 million units of smartphones and is expected to ship 190 million units this year. The target for 2021 is equal to 21% and 26% of these shipments, respectively.
Huawei’s lowered shipment target is largely in reaction to US sanctions that is hampering its ability to secure components. The company is effectively barred from purchasing semiconductors used in smartphones and notebook PCs starting on September 15. It can use chips from its inventories but it won’t be able to use the latest processors that its rivals will use.
Huawei’s rivals such as Samsung will likely benefit from this recent development, especially in markets such as China and Europe.
Out of Huawei’s full-year sales of 858.8 billion yuan last year, 506.7 billion yuan (59%) came from China and 206 billion yuan (24%) came from Europe. The company launched its flagship smartphones first in Europe and has been aiming to expand is presence there.
Samsung was aiming to expand its market share in Europe next year, people familiar with the matter said. The company is No.1 there but saw both its shipment and share decline in the first half of 2020.
The South Korean tech giant is also aiming to ship 300 million units of smartphones in 2021. The new, aggressive target is aimed at taking advantage of the vacuum caused by Huawei’s troubles.
Samsung moved 295 million units of smartphones in 2019, while it is expected to ship between 240 million units to 260 million units this year.
The company is also positioned to take advantage of the dispute between India and China. Samsung is aiming to be aggressive in India next year as well.
However, the company wasn’t looking to make such aggressive pushes in China as it has less than 1% market share there and is unlikely to recover its past glories there.
Huawei’s vacuum in China will likely benefit Xiaomi the most. Xiaomi became the third largest mover of smartphones in Europe in the second quarter, surpassing Huawei, according to market research firm Canalys. It has a share of 17% and its shipment increased 65% from the year prior during the quarter.
Huawei saw its shipment drop 17% year over year and ranked fourth in the second quarter, Canalys said. Samsung was the largest vendor with 30% market share, followed by Apple’s 21%.
Huawei has said it aimed to become the largest smartphone maker this year, prior to US sanctions. It was the largest shipper of smartphones in the second quarter this year.