Apple Inc. (NASDAQ: AAPL) management says China shipments are critical to its success, but some analysts say its market share there has dropped to fifth place. One of the reasons is Huawei, the third largest smartphone company in the world, behind Samsung and Apple. Most of its shipments are in China.

According to Strategic Analytics, iPhone sales did slip to fifth in the second quarter. Its China shipments were 7.3 million, down from 9.7 million the year before. Granted, overall smartphone shipments dipped in China for the period, but just a bit to 105.9 million from 109.0 million in the second quarter of last year.

By comparison, Huawei’s second-quarter shipments for the period were 19.1 million, up from 16.6 million a year earlier. Huawei is not the only home-grown competitor. Shipments of OPPO moved to 15.2 million from 7.3 million. Shipments by Xiaomi rose to 19.5 million. But it did lose ground, down from 12.8 million the year before.

Globally, the picture is better for Apple, but that could change if Huawei can get into large markets. According to Gartner, in the second quarter worldwide, Samsung shipped 76.7 million smartphones, Apple shipped 44.4 million and Huawei 30.7 million.

Huawei may have a product that could compete with the iPhone, which makes matters worse for Apple.

The Androids Huawei Mate 8 is a worthy competitor for the iPhone 6. And, like all other manufactures, the Androids Huawei Mate 8 will be updated soon. Huawei couldn’t sell so many phones without clever engineers and marketers. Its unit shipment numbers show it has both.

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