Huawei overtook Apple in the second quarter of 2018 to become the world's second largest phone vendor, according to new market research.

The embattled Chinese phone maker shipped 54 million handsets in the quarter, an increase of 41 percent over last year, researcher Canalys reported Tuesday. Huawei's success was due in part to strong demand for its flagship P20 handset and its Honor sub-brand, the researcher said.

Samsung with its Galaxy phone line retained the phone crown but lost ground to upstart Huawei by shipping 73 million units, an 8 percent decline year over year. Apple slipped to No. 3, shipping 41 million iPhone units with a growth rate of 1 percent.

"Huawei's strategy has evolved significantly over the last six months," Canalys analyst Mo Jia said in a statement. "Despite its failure to strike a US carrier partnership earlier this year, the company has turned around quickly, moving away from its drive for profitability and focusing instead on finding volume growth at the low end."

Market researcher IDC reported similar numbers for smartphone shipments. It also said Tuesday that Apple could surge in the coming months with the expected introduction of new iPhone models.

"It is worth noting that Apple moved into the top position each of the last two holiday quarters following its product refresh, so it's likely we'll see continued movement among the top ranked companies in 2018 and beyond," said Ryan Reith, an IDC vice president, in a statement.

The milestone is a bright spot in an otherwise difficult year for Huawei. The company, which makes carrier networking equipment in addition to phones, has come under fire from the heads of the CIA, the FBI and the National Security Agency.  During open Congressional testimony in February those officials advised Americans not to purchase or use Huawei products and services out of worries that they're used to spy.

In January, AT&T pulled out of a landmark plan to sell the Mate 10 Pro, an important high-end Huawei phone. Verizon reportedly also scuttled a deal to carry the device, based on political pressure.

Originally published July 31 at 3:46 p.m. PT.
Updated Aug. 1 at 7:50 a.m. PT:  Add information from IDC.

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