Huawei says it aims to recover its overseas smartphone market share and expand HarmonyOS globally within one to three years, as its smartphone and EV sales slow
BEIJING — Faced with a slowdown in the smartphone and car markets, Huawei's consumer business is choosing to focus on phones with homegrown chips.
Context & Ripple Effects
Huawei has spent 2024 building the prerequisites for an operating-system challenge: HarmonyOS 5.0's rollout was accompanied by a claimed base of more than 1 billion devices and more than 15,000 apps, while Counterpoint put HarmonyOS at 16% of China smartphone sales in late 2023. Huawei also set a 100,000-app target, signaling that application availability—not device reach alone—was central to its strategy.
The overseas push extends that domestic ecosystem effort while the consumer business shifts its emphasis toward smartphones using homegrown chips. It makes Huawei's phone business, rather than its EV-linked sales, the vehicle for testing whether the HarmonyOS stack can travel.
First-order effects
- Huawei is concentrating its consumer-business effort on smartphones with homegrown chips and on taking HarmonyOS into overseas markets over the stated one-to-three-year window.
- HarmonyOS developers and prospective partners face a broader addressable market, but must support an OS that is seeking to compete beyond its established Chinese base.
Second-order effects
- Android and iOS face a more direct platform challenger in overseas handset markets if Huawei converts its device base and app program into local distribution and developer support.
- Huawei's chip-and-OS pairing ties overseas handset growth more closely to adoption of its own software stack, rather than treating HarmonyOS as a China-only differentiator.
Third-order effects
- If Huawei gains overseas handset share while expanding HarmonyOS, smartphone competition shifts further toward vertically integrated hardware-and-software ecosystems rather than handset specifications alone.
- The outcome turns on whether Huawei can translate its domestic device and app base into overseas developer participation, making ecosystem scale a constraint on platform expansion.
The trend: Huawei is pursuing a vertically integrated smartphone strategy in which homegrown chips, its own operating system, and overseas distribution reinforce one another.