The news: The major shift this year in the mobile equipment market could be seen in two distinct trend lines traveling in opposite directions. On one side, major European vendors stagnated and declined while Canada's Nortel Networks succumbed to bankruptcy and, eventually, liquidation. At the same time, Chinese vendors Huawei and ZTE emerged as viable, formidable competition, winning contracts inside and outside of China. Huawei, in particular, grew in stature and influence.
Numbers from research firm Dell'Oro hinted at the trend in the first quarter. Huawei's global market share doubled to 15 percent, while both Nokia Siemens Networks and Alcatel-Lucent saw their market share decline, to 21 percent and 14 percent, respectively. In late March, Huawei won a contract to provide infrastructure for Cox Communications' 3G wireless network, further establishing its bona fides in the North American market. Later in the spring, a UBS research note said Huawei had been short-listed--along with industry leaders Ericsson and Alcatel-Lucent--for AT&T's LTE trials.
In the second quarter, Ericsson continued to pace the market with a 32 percent market share, according to Dell'Oro, while Huawei and ZTE rose at the expense of Nokia Siemens and Alcatel-Lucent. By the second quarter, both Huawei and ZTE had nearly doubled their market share compared with the year-ago quarter.
In November, two events occurred within 10 days of each other that crystallized the new market dynamic. Norway's Telenor selected Huawei as the vendor for its LTE network, snubbing Ericsson and Nokia Siemens on their home turf. And, according to Dell'Oro, Huawei squeaked past Nokia Siemens for the No. 2 global market position.
Why it was significant: By the end of the third quarter, Huawei commanded around 20 percent of the global infrastructure market and ZTE had 7 percent, according to Dell'Oro. The growth of the two Chinese vendors came at the expense of Alcatel-Lucent and Nokia Siemens, which both continued to struggle. As Huawei looks to boost its North American presence next year, and positions itself as a top-flight competitor for LTE contracts, the pressure will be on market's established vendors to catch up.