Samsung Electronics has a chance to reinforce its position in the structurally flagging smartphone market, in the midst of turmoil from the U.S.-China trade war, ratings agency said on Monday.
The Chinese tech giant Huawei losing access to Google’s Android operating system could “significantly hurt” Huawei’s smartphone sales outside China which could help South Korea’s Samsung Electronics expand its market share, according to ratings agency.
The limitations on U.S. firms providing hardware, software and components to Huawei’s smartphone business may stir up the smartphone manufacturing by ceasing Huawei’s positive momentum.
"Consumers used to the Android operating system are likely to consider buying other smartphone brands than Huawei, and Samsung could restore market share especially in regions such as Europe, Asia ex-China and South America where Huawei achieved most of its growth in recent quarters," the ratings agency said.
Huawei generated nearly half of its revenue outside China as at end-2018.
According to ratings agency, apple may possibly turn into another victim of the U.S.-China trade spat and its market-share loss might accelerate in the Chinese market, which will benefit other local smartphone brands.
The main rival of Samsung in the area of new-generation smartphones, such as 5G and foldable phones is Huawei.
The U.S.-Huawei trade matters possibly will give Samsung an opportunity to get an early lead in these markets, even though this will rely on how long the sanctions last, agency said.
UK and Japanese firms have followed suit in deferring the launch of Huawei's 5G smartphones, which can help lift the sales of Samsung and LG Electronics, at least in the short term, it added.
Ratings agency anticipates the stimulating outlook for smartphone makers to remain in 2019 in light of frailer demand because of saturation in developed markets and a longer replacement cycle.
In the first three months of the worldwide shipment volumes of smartphones tumbled 6.6 percent this year from a year ago to 311 million units, weakening for the sixth consecutive quarter according to the International Data Corporation.
Huawei was the only major company showing growth with a 50 percent rise in Q1 smartphone shipment volumes from last year.
Huawei's shipment market share expanded to 19 percent in Q1 2019, increase from 12 percent in Q1 2018, closing the gap with Samsung's 23 percent share.
In the first quarter, Samsung’s handset part declined with revenue falling by 6 percent and operating profit slipping 40 percent year on year. In spite of the launch of its new flagship model Galaxy S10 series, Samsung volume fall 8.1 percent to 71.9 million handsets shipped in Q1.