Samsung could benefit from US Huawei ban

May 22, 2019, 08:26 am

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Huawei’s P30 series advertisement posted in front of Apple Store at the Nanjing Road in Shanghai, China./ Source: Yonhap

By AsiaToday reporter Ahn So-yeon 

As top American IT companies including Google and Intel are cutting off their dealings with Huawei, observers say that Samsung Electronics can partially benefit from the ban. Until recently, Huawei has threatened Samsung with its second largest market share in the global smartphone market. However, its influence over Europe, Asia, and South America is expected to lessen inevitably due to the ban. Analysts say that it will be a good chance for Samsung to widen the gap with Huawei by expanding its market share. 

However, some claim that the US sanctions would inevitably weaken demands for smartphone market, and that is not good news for Samsung. Besides, the escalating US-China trade tensions are putting a brake on China’s plan to become the world’s dominant technological power (also known as the “Made in China 2025” plan), raising concerns about market uncertainties.

On May 21, many securities analysts said that the US’ Huawei ban will have a positive impact on strengthening Samsung’s smartphone business. They said Samsung will be benefited from the US ban as 75 million units of Huawei smartphones out of 240 million units to be sold this year will not have Google’s flagship services.

“American chipmakers supply a significant portion of smartphone chips. Huawei will face difficulties in manufacturing smartphones if the supply of chips is cut off,” said Korea Investment & Securities research analysts Jo Chul-hee, Yoo Jong-woo, and Kim Jung-hwan. “If Huawei’s smartphone sales are sluggish, rival phone brands such as Samsung are likely to take advantage. Korean camera module companies, which are highly dependent on Samsung, are expected to be benefited in the medium and long term.”

According to global market research firm Counterpoint Research, Huawei’s global smartphone grew by 50% in the first quarter of 2019, knocking Apple down from the second position worldwide. Its presence grew to 17%, narrowing the gap with the top-ranked Samsung to 4% point from 8% point in the same period last year.

“Huwei had a great impact on Samsung’s smartphone market share decline in Western Europe and emerging markets. Therefore, the current situation would be a great chance for Samsung to expand its market share in the corresponding markets,” said Noh Geun-chang, an analyst at Hyundai Motor Investment & Securities. “Huawei’s market share decline is inevitable,” the analyst added.

“Huawei has a strong presence in Europe, China, and India. It is expected to be hit in these markets,” an official from electronic industry said.
#Huawei ban #US #Samsung Electronics #smartphone 
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