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US sanctions for nothing? Huawei stands leader in phone sales

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By Seymur Mammadov

Seymur Mammadov is the Director of the International Expert Club «EurAsiaAz» which deals with strategic issues of Eurasian Region.

Whichever side the United States does not approach China, and it fails to catch. For the second year, the United States has been deliberately working to weaken China’s economic influence and all to no avail.

The Chinese are wriggling out from under the Trump sanctions quite deftly and productively. Even more – American pressure seems to open up a second wind and give strength to China.

The current American administration has set itself the goal of eliminating a competitor in any way. But things are not going as planned in Washington.

Recently, the telecommunications market was shocked by the news that the Chinese Huawei, despite all the measures taken by the US authorities, became the largest manufacturer in the global smartphone market, surpassing both Samsung and Apple.

According to Counterpoint Research, Huawei held a 19 percent market share versus Samsung’s 17 percent. According to the results of the second quarter of 2020, Huawei shipped 55.8 million smartphones, and Samsung – 53.7 million.

Such are the numbers that have thrown into confusion smartphone manufacturers and politicians who expected the Chinese giant to go bankrupt by now.

Today, think tanks and experts are trying to understand the situation and understand how it happened that Huawei, heavily compressed and deprived of significant room for maneuver, instead of living out its last days in convulsions, managed to achieve such a result.

The fact is that the United States began to squeeze Huawei out of the high-tech market in May last year. By Trump’s decree, Google, Intel, Broadcom, YouTube and others stopped working with the Chinese company. Every smartphone user understands what the loss of Google services means. The ban on Google was introduced in September 2019, and in December the Chinese created an alternative to it called Huawei Mobile Services (HMS), and in May of this year, an alternative to YouTube was found – the French video service Dailymotion.

China continues to respond to its opponents with new developments. Therefore, it is quite expected that Huawei was the best-selling smartphone in the first half of the year. Despite the US measures and sanctions, and despite the serious problems created by the pandemic for the Chinese economy, Huawei has performed well, proving that it remains competitive and even became an even stronger player.

And now let’s dwell in a little more detail on the reasons for this situation, which are so worried about analysts today.

The first is a pandemic. The pandemic has created a lot of problems even for very large and very successful corporations. The Korean Samsung has lost its positions, forced to close stores in the USA, India, Europe, and Latin America. Sales also dropped significantly due to the decline in purchasing power among many fans of this South Korean brand. In such a situation, budget smartphones turned out to be the most popular. Huawei’s pricing policy is flexible enough and is designed for affordability, with the exception, of course, of the newest and most advanced models, although high prices for them tend to decrease gradually. This is a very correct policy, especially in times of crisis. Demand creates consumption. This is a well-known formula.

The second reason may lie in the national mentality of the Chinese people, with the reaction of the Chinese people to the trade war between the United States and the PRC, in which Huawei has become the lever of US pressure on China. The aggressive campaign launched by Washington against Beijing has stirred national pride. When buying a new smartphone, patriotic Chinese consumers began to give preference to gadgets of this particular brand in an effort to support it during a very aggressive US foreign economic policy.

Now for the third reason. We can assume with a certain degree of confidence that it is the main predetermined of the success of the Chinese company. The COVID-19 pandemic has brought down even the world’s largest and most resilient economies. China is no exception. But unlike others, the Chinese economy began to recover almost immediately. Contrary to the predictions of ill-wishers, already in the second quarter of 2020, China’s GDP increased by 3.2 percent after a 6.8 percent drop in the previous period. The Chinese economy has shifted from slowdown to growth, which is compelling evidence that it was the result of bold decisions and the right strategy of Beijing. The Chinese market, having survived the turmoil, began to recover at an accelerated pace. Huawei is an integral part of the Chinese economy, one of its flagships. And the success of the corporation was quite predictable.

The COVID-19 pandemic has become a very serious test for the whole world. The year is drawing to a close, and the end of the turmoil is not in sight. According to forecasts, the world economy will face hard times after recovering from the pandemic. When the counting of losses begins, many countries will have a hard time. The financial possibilities of the European Union are already causing serious concern. But many factors indicate that no matter how the domestic and international economic situation develops, China, as it is believed in the PRC itself, will always stand on the right side of history.

And it seems that the sensation arranged by Huawei will not be the last.

Central Desk
Central News Desk.

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