Limited production capacity cited as reason.
As you know, US sanctions forced Huawei to sell its subsidiary Honor. According to TrendForce forecast, Honor will be able to occupy no more than 2% of the smartphone market in 2021 due to limited manufacturing capabilities and possible pressure from the United States.
In particular, while sanctions against Huawei are in effect, Honor will not use HiSilicon single-chip systems. At the same time, contract manufacturers of semiconductor products do not have a reserve capacity to meet another customer’s needs. This means Honor will have to deal with a component shortage. Another factor that should not be discounted is that, due to relatively low purchase volumes, Honor will not count on large discounts directly related to volumes.
As for Huawei’s share in the smartphone market, it is expected to decline from 14% to 4% in 2021. Analysts believe that other Chinese manufacturers will take advantage of the weakening of the competitor. Thus, Xiaomi will increase its share from 12% to 14%, Oppo – from 12% to 14%, and Vivo – from 9% to 11%.