The world's biggest smartphone market China suffered a decline in sales for the first time with annual shipments down by 4% in 2017.
Meanwhile, shipments fell for both Oppo and Vivo, by 16% and 7% respectively, but they held onto their respective second- and third-place positions.
Canalys research analyst Mo Jia said: “Huawei’s push into tier-three and tier-four cities has yielded positive results.
“Nova and Honor have successfully gained share from smaller vendors, such as Gionee and Meizu. Honor’s performance has complemented Huawei’s success, by contributing more than half of Huawei’s total shipments. But competition between Huawei and Honor is getting fierce, and Huawei must deal with possible internal cannibalization.”