While the rate of decline has eased, the Chinese market is expected to weaken in the following quarters, Canalys said. Both Apple and Samsung's growth seems to be at a high point, as both brands fell this quarter year over year.
IDC says smartphone vendors shipped a total of 342 million devices during Q2 2018, compared with the 348.2 million units shipped in the second quarter of 2017.
Samsung suffered the biggest decline of the quarter, with shipments falling 10.8 per cent to 70.8 million, or 20.6 per cent of the market. Huawei raced into the second spot selling 54.2m phones in the quarter, up 41%, for a 15% share of the market.More news: Paul Manafort's bank fraud trial begins in Virginia
It's worth bearing in mind that Huawei also owns the Honor brand of mid-range devices, which has contributed to the company's growth in many markets across the globe.
Stanton said: "Huawei's momentum will obviously concern Samsung, but it should also serve as a warning to Apple, which needs to ship volume to support its growing services division".
Want more posts like this delivered to your inbox? "Huawei's P20 Pro is the first flagship smartphone model to be equipped with triple cameras, beating competitors to market", IHS Markit analyst Gerrit Schneemann said in a note.
"Huawei is shifting to more value-added models, by launching new flagship smartphones with the latest features", said Gerrit Schneemann, an analyst with HIS.More news: Gonzalo Higuain agrees to AC Milan switch
"The importance of Huawei overtaking Apple this quarter can not be overstated", said Ben Stanton, a senior analyst at Canalys, which also reported the shift in quarterly market share. While it enjoys lucrative smartphone sales and increasing brand recognition in the European and Asian market, the Chinese company is still struggling to establish a foothold in the US. "India is our benchmark for creating successful global products". The U.S.is the biggest smartphone market in terms of revenue generation, with Apple and Samsung having the biggest piece in it. Revenue rose to 325.7bn yuan (£36.52bn), while operating margin rose to 14%, from 11% a year ago.
In the full-year report for 2017 almost half of Huawei's business came from carriers, with its consumer business occupying almost 40 per cent of revenues.More news: Apple Earnings: Shares Gain 3% in After Hours