Core Viewpoint - Gree's air conditioning market share has significantly declined, particularly during the peak sales season in July, leading to increased competition from Xiaomi and the impending entry of Huawei into the air conditioning market [1][3][6]. Market Performance - In July, Gree's air conditioning sales dropped by 16.9% year-on-year, with its market share falling to 17.2% [1][3]. - Midea remains the market leader with a share of 26.8%, despite a 5.3% decline [3]. - Xiaomi's market share has surged to 13.7%, reflecting a remarkable year-on-year growth of 53.9% [3][6]. - Gree's market position is threatened as the gap between Gree and Xiaomi has narrowed to 3.5% [3][6]. Competitive Landscape - The entry of Huawei into the air conditioning sector is a significant concern for Gree, as Huawei plans to leverage its technology and ecosystem to compete effectively [6][10]. - Huawei's air conditioning products will follow a model similar to its automotive strategy, focusing on software and ecosystem integration rather than traditional manufacturing [8][10]. - The competition is shifting from product-based to ecosystem-based, with Xiaomi already demonstrating success in this area [10]. Strategic Implications - Gree has the potential to collaborate with Huawei to create a new air conditioning brand, although it remains uncertain whether Gree's leadership will consider such a partnership [12].