Huawei becomes first Chinese company to ship more than 100 million smartphones in a year

Hong Kong: Huawei Technologies Co became the first Chinese handset vendor to ship more than 100 million smartphones in a year when its 2015 shipments defied a market slowdown and jumped 44 percent, thanks to strong sales domestically and in Western Europe.

Shenzhen-based Huawei disclosed on Wednesday it shipped 108 million smartphones last year, as it sought to shed its budget supplier image to target higher-margin premium models. In comparison, the global industry is expected to have grown at a single-digit rate in 2015 for the first time.

Huawei's upbeat performance comes at a time when industry leaders Samsung Electronics Co and Apple Inc are potentially facing a tough year ahead.

Samsung said it expected a difficult business environment in 2016 due to a weak global economy and heightened competition, while a Nikkei report said Apple was expected to cut production of its latest iPhone models by about 30 percent in the January-March quarter due to mounting inventories.

Chinese handset makers are providing stiffer competition for the smartphone industry giants as cost-conscious consumers are looking for cheaper alternatives with similar features and frills.

"There are increasingly more Chinese vendors who can offer good products, so you don't necessarily have to buy a phone from Samsung," said Avril Wu, analyst at research firm TrendForce.

"They (Chinese vendors) are taking market shares from the top leaders."

But it was too early to say if Huawei could stay as a solid contender to Samsung and Apple, as smaller Chinese players such as Xiaomi Inc and Lenovo Group Ltd often swapped rank after price wars, analysts said.

"In China it's true that Huawei grew tremendously over the past six months, but it's a bit of a dog fight within the Android ecosystem," said Carolina Milanesi, analyst at Kantar Worldpanel ComTech.

"Huawei's going after Xiaomi and all the other smaller Android players."

Huawei remains a distant third in the global smartphone market, with a market share of 7.5 percent in the third quarter, after Samsung's 23.8 percent and Apple's 13.5 percent, according to research firm IDC.

Moving up the value chain effectively in the global smartphone market remains a challenge for Chinese vendors as they tend to sacrifice profit margins to boost sales volumes, analysts said.

Huawei said revenue for its consumer business group, which sells products such as smartphones and tablets, jumped 70 percent year-on-year to $20 billion in 2015.

Worldwide smartphone shipments will grow 9.8 percent in 2015 in the industry's first year of single-digit growth, down from 27.5 percent in the previous year, according to IDC.