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Samsung, LG Expected to Benefit from Sanctions on Huawei
Effects of Anti-Huawei Campaign Filter down
Samsung, LG Expected to Benefit from Sanctions on Huawei
  • By Kim Eun-jin
  • June 7, 2019, 10:24
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Korean smartphone manufacturers are expected to benefit from the commercialization of 5G services and a Huawei boycott by the United States.

Korean smartphone manufacturers have been sandwiched between Apple and Chinese producers in recent years. Samsung Electronics has maintained the number one spot in the global smartphone market until the first quarter of this year, but it is behind Apple in terms of profitability and Huawei in terms of growth rate. However, they are expected to benefit from the commercialization of 5G services and a Huawei boycott by the United States.

Samsung’s global smartphone market share in the first quarter of this year stood at 21 percent, with its shipments dropping 8 percent from the same period last year. LG Electronics’ smartphone shipments shrank by 40 percent and its market share remained at 2 percent during the same period.

On the other hand, Huawei, the world's second smartphone maker, posted a 50 percent surge in shipments on year and its market share rose to 17 percent from 11 percent. Shipments of Oppo and Vivo in China also swelled by 10 percent and 27 percent, respectively. Apple’s shipments sank 20 percent, losing second place to Huawei, but is maintaining a dominant position in the premium phone market. In particular, Apple accounts for about 90 percent of global smartphone profits thanks to its strategy of “selling fewer smartphones and making more profits.”

But Korean smartphone makers have a relatively bright future. This is because the growth of Huawei is expected to slow down in the face of market changes in the 5G era. Samsung and LG have responded quickly by launching the Galaxy S10 5G and V50 ThinQ in global markets. In addition, Samsung Electronics plans to launch the Galaxy Note 10 5G model in the second half of this year and LG Electronics plans to expand its market share by launching a follow-up model of the V50.

Industry experts forecast that Samsung Electronics and LG Electronics will benefit from sanctions on Huawei in Europe. In the first quarter of this year, Huawei ranked second in the European smartphone market with a market share of 24.9 percent after Samsung Electronics (32.3 percent). However, unless Google’s Android operating system is available to Huawei in the future, Huawei's share will gradually decrease starting in the second half of this year.