After sanctions imposed by the United States last year, Chinese smartphone manufacturer Huawei is struggling mightily.

The company fell out of the world’s top five organizations in terms of smartphones shipped – the first time it’s ranked outside that group in six years, according to Canalys.

In the second quarter of 2020, the company was No. 1. In May, Huawei was blacklisted by the U.S. and placed on the Entity List, which restricts foreign semiconductor companies using American technology to manufacture their chips from selling said chips to Huawei. To sell hardware and software to Huawei now, the U.S. requires American companies to source a license, and the U.S. government has shown few signs that they’ll grant licenses at all.

This has led to major companies ending their partnerships with Huawei. Google will no longer license its Android OS to Huawei, which may not impact its Chinese sales much where Google services are already limited, but could impact loyalty internationally.

Right now, Huawei relies on over 30 American firms in its core network of suppliers. Key partners like Qualcomm and Intel signaled back in May that they would not sell to Huawei until further notice.

With these sanctions in place, competition is posed to be incredibly tough for Huawei, especially with Apple’s numbers this year – Apple shipped 90.1 million phones during Q4, a new record for shipments from any smartphone vendor in history.

Will competition be “fair” moving forward? Can Huawei make a comeback under such stringent lockdown? Host Daniel Litwin dives in on this MarketScale industry Update.

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