In a promising turn of events, China’s smartphone sales have experienced a significant uplift, as reported by Counterpoint Research. The market has shown signs of recovery with a notable 11% increase in year-over-year sales within the first four weeks. Notably, Huawei has emerged as a leader in this rally, contributing to the positive momentum in the industry.
During the aforementioned period, Huawei witnessed an impressive surge of over 90% in sales, attributed to strategic promotions leading up to Alibaba’s Singles Day event on November 11. This stark resurgence marks a departure from the preceding quarters’ slowdown in device sales, which had been influenced by weakened consumer demand amidst an economic downturn.
“The numbers are suggesting a recovery. There’s some momentum building to be sure,” emphasized Mengmeng Zhang, senior analyst for China. “This is auspicious as we head into reporting season for the 11.11 sales period.”
Counterpoint Research attributes Huawei’s revival to the resounding success of its Kirin processor-powered Mate 60 series, with the company selling 1.6 million of these handsets in just six weeks. Archie Zhang, a China analyst, noted, “Growth has been stellar with its new launch marketing and strong media coverage around its ‘Made in China’ chipset. Demand continues to be high double-digits, and we’re also seeing a halo effect, with other models from the vendor performing well.”
Notably, Apple (AAPL) has also made substantial progress in the Chinese market. Tim Cook, Apple’s CEO, highlighted that iPhone revenue set a quarterly record in mainland China, signaling the company’s notable achievement in the region.
However, production challenges have been a recurring theme throughout the year for both Huawei and Apple. Counterpoint revealed that Apple has encountered issues with specific color variants of the Pro Max, leading to extended wait times and higher prices on certain e-commerce platforms. On the other hand, Huawei has faced shortages due to unexpectedly high demand and resulting strain on its component supply chain and electronic manufacturing services providers.
“Huawei’s ability to scale up to this new normal will be a major determinant not just for their own growth but for the broader market,” expressed Ivan Lam, senior analyst for manufacturing. “Indicators are showing overall sales to be up, but how much Huawei contributed to that outperformance is the tell for the rest of the quarter.”
Key Insights for Investors
Investors keen on the tech and smartphone industry should take note of the significant resurgence in China’s smartphone market. Huawei’s remarkable performance, alongside Apple’s record-breaking achievement with iPhone revenue, underscores the potential for growth and market resilience in the face of challenges. As the industry navigates through production issues while maintaining a positive trajectory, prudent investors could find diverse opportunities for long-term gains in this evolving landscape.
Amidst the prevailing market dynamics, it’s essential for investors to stay informed, monitor the performance of key players, and assess the implications of pivotal events, such as the 11.11 sales period. With a forward-looking perspective, investors can position themselves to make informed decisions and capitalize on the evolving opportunities within the vibrant smartphone market of China.