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Huawei’s ban: who are the biggest winners?

By Georgi Zarkov

Published: May 29, 2019, 9:08 AM

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This article may contain personal views and opinion from the author.

Huawei’s ban: who are the biggest winners?

Even those that aren’t particularly interested in smartphones and mobile technology are now aware of what’s happening with Huawei. The news about the US ban of the Chinese tech giant has been covered by pretty much every media outlet around the globe. And while those stories are often followed by what the consequences for Huawei will be, there isn’t that much talk about what the consequences for other manufacturers will be.

With that, we don’t mean the part suppliers that will lose one of their biggest clients. Instead, we’ll look at those that will benefit the most in the upcoming months (years?) as the reality of the ban sets in and we start seeing it affect the market in a more direct way.

As you’re probably aware, the main reason for the US government’s actions is the fact that Huawei networking equipment is broadly used within the States and is allegedly compromised in a way that serves the Chinese government. And we will take a brief look at what will transpire in the networking sector once Huawei is out of the picture, but first, we’ll focus on the smartphone market.

Winners in the smartphone market

You don’t have to be an industry insider to quickly realize which companies stand to benefit the most out of Huawei’s mishaps. A quick look at the list of the world’s biggest smartphone makers will give you a solid answer.

Huawei recently made its way to the second spot on that list, sandwiched between Samsung at number one and Apple at number three. And while Apple will probably see a slight boost in sales as well, it’s not really worth looking at since Huawei doesn’t have a presence in the States where Apple holds a huge market share. Instead, the company at number four on that list - Xiaomi will reap a rich harvest in the upcoming months. So, Samsung and Xiaomi then? Well, let’s see how they’ll look to make the best of this situation.

Samsung has all bases loaded

Samsung seems so well prepared to handle fleeing Huawei customers that it almost feels like the company knew in advance something like that will happen. The South Korean manufacturer has stacked its smartphone lineup from top to bottom. This year alone, Samsung has released three budget phones from the M series, 9 mid-range phones from the A series and 4 S series flagships, with at least two Note 10 models rumored to come out in August.

So, depending on the needs of each individual market, Samsung can pick the most suitable models from each line and with the help from its marketing department, it can quickly make people forget Huawei ever existed. To top it off, Samsung’s latest devices are some of the best in terms of quality and value for your money it’s ever made, so it’s not like customers are getting a bad deal.

The Galaxy A50 and A30 are just a small sample of Samsung's current portfolio

The Huawei ban couldn’t have come at a better time for Samsung. The Chinese giant gained a ton of momentum over the past few years and was passing competitors like they weren’t even trying. Once Huawei reached the number two spot globally, there was only one target left on its list: Samsung. But now, with sticks coming between Huawei’s spokes from all sides, it seems that run has ended. Now all Samsung’s left to do is make sure it has enough room in its belly for a big piece of Huawei’s pie. But it’s not the only company preparing to feast on Huawei’s delights.

Xiaomi has a chance to become the top Chinese phone maker

Even today, when people hear the name Xiaomi, most think of it as some obscure Chinese brand (if they’ve even heard of it before). And while that’s true in the States, in Europe, Asia and South America the company is now a major player on the smartphone market, which is how it reached the fourth spot on the biggest manufacturers’ list. Still, if it wants to fill Huawei’s shoes, there’s a lot more work left to be done.

Xiaomi likely won’t reach Huawei’s technology levels in the field of smartphone cameras, chips and other developments but the company has been steadily releasing better and better high-end models. Known mostly for its super-aggressive pricing strategy, Xiaomi is now trying to shake off the “cheap” stigma off its name and move towards higher price segments, where Huawei has successfully positioned its Mate and P series flagships. Xiaomi will try to do that without losing its customers that are used to buying well-specced phones on the cheap. The attractive prices fueled its impressive growth over the last few years but now its time to change gears.

In order to not lose ground on the so-called emerging markets, however, Xiaomi separated the subbrand Redmi into its own entity that will take over the budget to mid-range smartphones. Or at least that was the initial plan. In a move that doesn’t seem to fit that strategy, Redmi just recently announced the Redmi K20, a phone with Qualcomm’s best chip, the Snapdragon 855, meant to become the next “flagship killer”. Now that it has a flagship in its lineup, it seems like Redmi is becoming to Xiaomi what Honor is to Huawei, rather than just a brand for cheaper phones.

Either way, Xiaomi is in a strong position as well. However, if it wants to take full advantage of the situation, it will need more than lucrative smartphones to offer. The company will have to pour some serious money into marketing in order to become a household name and get associated as a brand that’s a viable alternative to Samsung and Huawei in the premium segment. That will be an even harder challenge now that the ban has put a stigma on Chinese phones not only in the States but worldwide as well.

So, on the smartphone front, Huawei’s competitors have their claws already sharpened, but what about the networking business?

Winners in networking equipment

When it comes to networking, the most important thing to talk about is our favorite 2019 buzz word — 5G. Since 5G is a new and up-and-coming technology, telecommunications providers around the world are gearing up to introduce it to their customers. The different frequencies 5G uses means that existing base stations have to be upgraded and new ones put in place to provide better coverage because of 5G’s limited ability to pass through obstacles.

Of course, for hardware vendors such as Huawei, this means billions of dollars in orders up for grabs. And Huawei was in a very good position to get a good chunk of those orders. The company’s 5G equipment is considered to be the most advanced right now, some claims putting it more than a year ahead of the competition. However, now that the winds have changed, the wide adoption of Huawei hardware seems less likely. Of course, there will still be plenty of carriers that choose Huawei’s equipment for their networks, especially in China and other Asian markets. But in the States and in some European countries that have been considering similar restrictive measures, that’s out of the question.

Nokia (the real one, not the company that makes Nokia-branded phones) already has strong standings in the US. The company is working alongside Qualcomm to provide some of the hardware required for the 5G networks of Verizon, T-Mobile and AT&T.

T-Mobile is also working with another company once known for its mobile phones - Ericsson. Ericsson remains one of the biggest networking hardware providers in the world and has proven it’s up to the task by providing Swisscom’s 5G network in Switzerland, currently covering 54 cities in the country.

Meanwhile back in the States, AT&T is partnering with a couple of other familiar faces - Samsung and Intel. Samsung is unsurprisingly providing most of the hardware for South Korea Telecom’s own 5G network as well.

So, we have the whole bunch: Samsung, Nokia, Ericsson, Qualcomm, Intel. And those are just the big players. Many more smaller companies will fill various niches left empty after Huawei’s exile. And as the Chinese giant faces an uncertain future, all the rest are preparing for a feast.