Huawei's phone sales have taken a huge hit in another major market
UPDATE: It was originally stated that Huawei's smartphone sales accounted for 6% of sales during the final week of May. However, the number was actually 12%. The updated original story continues below.
Although Huawei’s US trade ban hasn’t yet affected the company’s ability to deliver existing smartphones to customers, the uncertainty surrounding the current situation has led to a drop in demand for the brand. This is especially noticeable in one of Huawei’s biggest international markets.
According to a report by WinFuture, Huawei’s smartphone sales in Germany dropped rather drastically in the weeks following the US trade ban’s implementation. Specifically, it’s said Huawei accounted for just 12% of smartphones sold throughout the final seven days of May in the market. For comparison, the brand’s local market share sat at a considerable 26% at the beginning of the month.
Unlike the US where unlocked smartphones only account for a small percentage of sales, shipments of these in Germany actually account for a rather large portion. And according to industry sources, Huawei sales at major retailers Saturn and MediaMarkt have each declined around 50% in recent weeks. Similarly, shipments of Honor devices are said to have dropped around 40%.
Naturally, carriers also play an important role when it comes to German sales, but things aren’t any better in this segment. It’s reported that the biggest issue Huawei is facing is a lack of demand from corporate customers who are now avoiding contracts that tie in their devices with data plans. Many are also said to be making last minute changes to agreements which essentially swap out Huawei’s phones for devices from rival brands.
In scenarios where demand is weak, retailers and smartphone manufacturers typically cut prices slightly in order to boost interest. But in this case, retailers and carriers are reluctant to slash prices because many of the devices in stock were purchased at the usual prices before the trade ban was announced, meaning that any drops could hurt profitability.