Samsung, Apple to compete for smartphone share to be relinquished by Huawei

Samsung Electronics and Apple are poised to compete for the high-end smartphone share likely to be relinquished by Huawei, particularly in markets other than China - a race that will have significant impacts on their respective supply chains, according to industry sources.

The competition between Samsung and Apple - following Huawei's forced retreat from the handset market due to the US trade sanctions - will not only affect the foundry businesses at TSMC and Samsung itself but also related supply chain makers in Korea, Taiwan and China, said the sources.

If Samsung gets the upper hand, its supply chain, consisting mostly of Korea-based firms, will gain more orders at the expense of their counterparts in Taiwan and China. Samsung's foundry business will also gain a boost for mobile chip orders from its smartphone unit, narrowing its market share against TSMC.

If Apple grabs more high-end smartphone market share from Huawei, TSMC will further cement its foundry leadership thanks to chip orders from the US client, while handset parts and components makers in Taiwan and China will also land more windfall orders from Apple.

The competition for handset market share is likely to heat up in 2021, as the inventory of handset parts and components that Huawei has been keenly building up ahead of the fresh US sanctions to be enforced next week should only last till year-end 2020, said the sources.

Huawei is currently the top smartphone vendor in China accounting for a 40-50% share, followed by Oppo, Vivo and Xiaomi. Apple holds about 10% and Samsung only about 1%.

Whether WeChat will be available on App Store in China or pre-installed in new iPhone devices will be crucial to Apple's chances of gainign a greater presence in China.

If WeChat is no longer available on App Store, Chinese consumers will eventually opt to choose smartphones from Oppo, Vivo or Xiaomi, the sources said.