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(By Yimou Lee and Ritsuko Ando for Reuters) — Huawei Technologies Co has become the first Chinese handset vendor to ship more than 100 million smartphones annually, defying a market slowdown to challenge leaders such as Samsung Electronics Co and Apple Inc.

The Shenzhen-based company said on Wednesday its smartphone shipments rose 44 percent annually to 108 million in 2015, thanks to strong sales in China and Western Europe as it seeks to shed its budget supplier image to target higher-margin premium models.

Hauwei’s upbeat performance comes at a time when industry leaders are facing a tough year ahead. Samsung said it expected a difficult business environment in 2016 due to weak global economy and heightened competition, while a Nikkei report said Apple was expected to cut production of its latest iPhone models by about 30 percent in the January-March quarter due to mounting inventories.

Analysts said it was too early to say if Huawei could become a serious rival to Samsung and Apple, as smaller Chinese players such as Xiaomi Inc and Lenovo Group Ltd often swapped rank in price wars.

“In China it’s true that Huawei grew tremendously over the past six months, but it’s a bit of a dog fight within the Android ecosystem,” Kantar Worldpanel ComTech analyst Carolina Milanesi said.

“Huawei’s going after Xiaomi and all the other smaller Android players.”

Huawei remains a distant third, with a smartphone market share of 7.5 percent in the third quarter after Samsung’s 23.8 percent and Apple’s 13.5 percent, according to research firm IDC.

Huawei said revenue for its consumer business group, which sells products such as smartphones and tablets, jumped 70 percent year-on-year to $20 billion in 2015.

Worldwide smartphone shipments are expected to grow 10.4 percent in 2015, down from 27.5 percent in the previous year, according to IDC.

(Editing by Stephen Coates)

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