Can Huawei’s new phone help it return to its glory days before sanctions?

Analysts say Huawei Technologies is returning to the Chinese smartphone market with its latest Mate 60 Pro phone, but the company’s chance to compete with Apple and Samsung Electronics is the US-sanctioned company. again very fragile.

Over the past week, Chinese consumers have flocked to Huawei’s usually quiet stores to buy the new model, priced at 6,999 yuan ($958) and with a home-made processor just a few centuries behind. the most advanced system, raising hopes that the Chinese giants might be reborn.

However, while Huawei’s Mate 60 Pro based in Shenzhen may prove popular with domestic consumers, analysts say its overseas appeal may be limited by the lack of popular apps like Google Maps. Pre-sale of the phone is currently only available in China, and there is no word on whether the handset will be sold overseas.

“Huawei’s strong comeback will have a huge impact on the Chinese smartphone market in the second half of the year and into 2024, and will have a huge impact on the Chinese smartphone market,” said Linda Sui, senior smartphone analyst. more to other Android phone brands competing in China’s high-end smartphone market.” with TechInsights.

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Sui added that while Huawei could reshuffle the top 5 smartphone brand rankings in China, this poses less of a threat to Apple, based in Cupertino, California because These brands have different target customer bases.

Huawei declined to comment on its marketing strategy for the phone.

According to data from consulting firm IDC and Counterpoint, China’s smartphone sales have fallen to 286 million units in 2022, with Huawei in sixth with a 7.9% market share, behind Vivo, Apple , Oppo, Honor and Xiaomi. This is a big change from Huawei’s heyday, when it led the Chinese market for four consecutive years from 2017 to 2020.

After being denied access to advanced semiconductors in September 2020, Huawei – which once competed with Apple in the global market – saw revenue in its consumer business. its consumer business will shrink sharply in 2021. In 2022, its consumer business fell by 11.9 percent year-on-year to 214.5 billion yuan ($29.35 billion).

To address the impact of US sanctions, Huawei divested its Honor phone business, and the company’s vast nationwide distribution network shrank. It has been outside the top 5 smartphone brands in China for the past two years.

That’s why the Mate 60 Pro model is being seen by some analysts as a potential savior for Huawei, with sales skyrocketing both online and offline.

Ivan Lam, senior analyst at Counterpoint Research, said the new model could help Huawei break into the top four brands in China in the fourth quarter, although there will be no race for the top spot. According to a research note by Counterpoint, Mate 60 Series shipments in the first 4 months after launch could reach 4 million units domestically.

Lam noted that Huawei has lost several offline sales channels over the past few years, which has affected its reach in third and fourth tier cities.

TechInsights, the Canadian semiconductor intelligence firm that identified International Semiconductor Manufacturing Corporation as the maker of the Cortex 9000 chip inside the Huawei Mate 60 Pro, has estimated that Mate 60 series sales will reach over 6 million units by Last year.

Although the Mate 60 Pro has surprised with its powerful processor in the face of tough US sanctions, there are still questions about the stability of Huawei’s chip supply.

Kuo Ming-chi, an analyst at TF International Securities, noted that Huawei is expected to sell at least 12 million units of the Mate 60 Pro in the 12 months following its launch. This figure would be up from last year’s Mate 50 Pro’s 2.5 million sales, but there’s still a good chance that sales of Apple’s upcoming iPhone 15 model, estimated at around 90 million units this year. .

Toby Zhu, an analyst at Canalys, said the new Mate devices will take revenue from Apple and other competitors in the segment. However, Huawei is expected to account for only about 12 to 14% of the estimated 280 million handsets to be sold in China by 2023, he said.

Additional reporting by Che Pan