Huawei's slide sets Samsung to take on Chinese rivals

By Baek Byung-yeul

Samsung Electronics will face fierce competition next year from Chinese smartphone makers such as Xiaomi, Oppo and Vivo as they look to seize Huawei Technologies' market share after the company has been hit by U.S. sanctions, according to industry analysts Sunday.

Huawei has fallen on tough times as Washington banned the supply of components made with U.S. equipment, software or design to the Chinese firm without prior approval, citing security concerns.

Industry analysts said Huawei is forecasted to sell 110 million smartphones in 2021, about a 42 percent decrease from 2020. Adding that there would be no dramatic changes in terms of lifting the sanctions under the new U.S. administration, they noted Chinese smartphone component makers have received an increased amount of orders.

Due to the continued sanctions, Huawei decided to sell its smartphone brand Honor ― budget smartphones targeting young consumers ― to a consortium of companies, some of which are backed by the Chinese government.

Huawei made the decision to focus on premium smartphones and leave a possibility to buy back the brand in the future when the company's situation improves, according to industry analysts.

Global smartphone sales in 2021 look set to increase by 9 percent year-on-year to 1.36 billion thanks to pent-up demand amid gradual removal of lockdown measures, according to data by market researcher TrendForce.

Samsung is also reportedly trying to release its high-end smartphone Galaxy S series as early as January, though previous S series devices have been rolled out in March.

“Huawei's reduced market share is an opportunity. Samsung Electronics is expected to agilely prepare for increasing its smartphone shipments. Early launch of the Galaxy S21 and the 2021 Galaxy A Series that feature four or five cameras are expected in the first quarter of next year,” said Roh Kyoung-tak, an analyst at Eugene Investment & Securities, adding that Samsung's smartphone sales will be increased by 17 percent in 2021 to around 310 million, year-on-year.

Samsung struggled in the first half of this year with its smartphone business due to COVID-19 and consequent lockdown measures around the world, but the Korean tech giant's smartphone sales in the third quarter were at around 78 million, an almost 42 percent quarterly increase, TrendForce said.

Due to the end of the holiday stock-up activities in Europe and North America and the competition from the new iPhones, Samsung's fourth-quarter smartphone sales will be at around 62 million, the research firm added.

To enhance its presence in the high-priced smartphone segment, Samsung is also expected to increase the sales volume next year of foldable smartphones such as the Galaxy Z Fold and Z Flip.