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Samsung shares rise amid Huawei’s mounting problems

Analysts say the US ban will damage Huawei’s ability to sell phones outside China, offering Samsung a chance to consolidate its position at the top of the global market.

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Samsung shares rise amid Huawei's mounting problems

On the back of Huawei’s mounting problems including a decision by Google to cut off the Chinese mobile phone maker from some updates to the Android operating system, Samsung Electronics surged more than four per cent on Tuesday.

The United States internet giant Google, whose Android mobile operating system powers most of the world’s smartphones, said this week, to comply with an executive order issued by President Donald Trump, it is cutting ties with Huawei .

In a statement, Google said it was “complying with the order and reviewing the implications”.

The move by Google, means the company has just lost its Android license, and its devices will no longer receive Android updates — nor will its future handsets be able to access Google apps as well as the Google Play Store.

Investors bet Huawei’s loss could benefit the world’s biggest smartphone maker Samsung which has been facing increasing competition from its Chinese rival, sending its shares soaring 4.3 per cent in afternoon trade in Seoul.

Analysts say the US ban offered Samsung a chance to consolidate its position at the top of the global market as the ban will damage Huawei’s ability to sell phones outside China.

An analyst at Samsung Securities, MS Hwang told Bloomberg News, “If you are in Europe or China and couldn’t use Google map or any Android services with a Huawei smartphone, would you buy one? Wouldn’t you buy a Samsung smartphone instead?”

According to industry tracker International Data Corporation, Huawei accounted for 19 per cent of global smartphone sales while Samsung had 23.1 per cent in the first quarter of this year .

Last week, Trump declared a “national emergency” empowering him to blacklist companies seen as “an unacceptable risk to the national security of the United States.” Analysts said that the move was clearly aimed at Huawei.

A ban on American companies selling or transferring US technology to Huawei had also being announced by the US Commerce Department, with a 90-day reprieve by allowing temporary licences.

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