Camera phone manufacturer Huawei is predicted to have a steep drop in production in 2021 due to recently applied US sanctions. While the smartphone industry as a whole is estimated to grow by approximately 9% this year, it doesn't seem that Huawei will enjoy a similar boom in sales. In fact, estimates show that Huawei may drop to seventh position in global production.
Huawei had previously been estimated to take the number two position behind Samsung and ahead of Apple in 2021. However, this prediction was made prior to the September 2020 sanctions and the latest estimates are now looking pretty dire for the company.
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Analysts predict that Huawei will only be able to produce 45 million smartphones this year. This is a steep drop from the 170 million smartphones it produced in 2020. The company is also predicted to lose a significant portion of its market share, falling from 30% to just 8%.
One key issue is that Huawei may have inadvertently created a competitor by selling its Honor business. The budget camera phone brand Honor accounted for more than a quarter of Huawei's annual shipments. The sale of Honor has also contributed to the overall drop in global production for Huawei. Trendforce also predicts (opens in new tab) that even if US sanctions are lifted, Huawei may not be able to regain its position.
It is however important to mention that these predictions are coming quite early in the year. The pandemic is creating a lot on uncertainty within the markets and outcomes could change quite drastically.