Best Tech News Site: TrendForce expects the smartphone market to slowly recover in 2021, but Huawei won’t benefit

Monday, January 4, 2021

TrendForce expects the smartphone market to slowly recover in 2021, but Huawei won’t benefit

After a dismal year, the global smartphone market will slowly start recovering in 2021, predicts TrendForce. But Huawei won’t benefit and, in fact, will fall out of the research firm’s list of the world’s top six smartphone makers by production volume.

In 2020, global smartphone production dropped 11% year-over-year to 1.25 billion units. This year, TrendForce expects it to increase by 9% to 1.36 million units, as people replace old devices and demand grows in emerging markets. But even that slight recovery is contingent on how the pandemic continues to impact the economy and the global chip shortage that is currently causing production delays across almost the entire electronics industry.

In 2020, the top six smartphone brands in order of production volume were Samsung, Apple, Huawei, Xiaomi, OPPO and Vivo. But this year TrendForce expects Huawei to slip out of that ranking, with the new top-six list comprising of Samsung, Apple, Xiaomi, OPPO, Vivo and Transsion.

Those six companies are expected to account for 80% of the global smartphone market in 2021, while Huawei will come in at seventh place.

The main reason for Huawei’s drop is the divestment of its budget smartphone brand, Honor. Huawei confirmed in November that it is selling Honor to a consortium of companies to save the division’s supply chain from the impact of United States government trade restrictions.

Huawei sells budget phone unit Honor to state-backed firms, distribution partners

The spin-out was meant to shield Honor from the sanctions that have hurt Huawei’s business. But “it remains to be seen whether the ‘new’ Honor can capture consumers’ attention without the support from Huawei. Also, Huawei and the new Honor will be directly competing against each other in the future, especially if the former is somehow freed from the U.S. trade sanctions at a later time,” said TrendForce’s report.

In a previous report published shortly after Honor’s sale was announced, TrendForce predicted that the deal, along with the global chip shortage, meant Huawei would take just 4% of the market in 2021, compared to the 17% it held in 2019, and estimated 14% in 2020. Apple is expected to take away some market share from Huawei’s high-end smartphones, while Xiaomi, OPPO and Vivo will also benefit. TrendForce expects the newly spun-out Honor to take 2% market share in 2021.