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Samsung to gain from Huawei’s troubles: Fitch

Photo by the Yonhap News Agency. Sketched by the Pan Pacific Agency.

Pan Pacific Agency | COMMUICATION AGENCY FOR PACIFICA REGIONS

SEOUL, May 27, 2019, Yonhap. Samsung Electronics Co., the world’s largest maker of smartphones, is expected to solidify its position in the global smartphone market as troubles surrounding China’s Huawei Technologies Co. deepened amid an escalating trade feud between Washington and Beijing, Fitch Ratings said Monday, reported the Yonhap.

Google has said it will stop supplying its Android software to Huawei, with analysts expecting that the ban will force Huawei, the world’s second-largest maker of smartphones, to lose its competitiveness outside China.

Global telecom carriers have also shunned Huawei’s equipment as American intelligence agencies suspect that Huawei is linked to the Chinese government and that the company’s devices may be exploited by Chinese spies.

“Turmoil from the U.S.-China trade dispute brings Samsung Electronics Co. an opportunity to strengthen its position in the structurally weakening smartphone market,” Fitch said in a statement.

“The loss of access to Google’s Android operating system could significantly hurt Huawei Technologies Co.’s smartphone sales outside China, which could help Samsung improve its market share,” it said.

Fitch expected Samsung to regain its market share in Europe, Asia (excluding China) and South America, where Huawei saw its market share grow in recent quarters.

“The restrictions on U.S. companies providing hardware, software and components to Huawei’s smartphone business could stir up the smartphone industry by pausing Huawei’s positive momentum,” Fitch said.

Huawei’s plight is also expected to help Samsung take a lead in the fifth-generation wireless market, Fitch said.

“Huawei is also the biggest competitor of Samsung in the area of new generation smartphones such as 5G and foldable phones,” it said. “U.S.-Huawei trade issues may give Samsung an opportunity to acquire an early lead in these markets, although this will depend on how long the sanctions will last.”

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