The fortunes of Apple and Huawei have seemingly gone in opposite directions since Huawei unveiled a smartphone featuring an advanced chip in August 2023. Since then, the Chinese tech giant has chipped away at Apple’s market share in China.
This week, Huawei is looking to upstage Apple again. It’s expected to release the Mate XT, the first commercially produced tri-fold phone, at its product launch event on Sept. 10, 2:30 p.m. Beijing time. That’s just hours after Apple’s own product launch event, where the U.S. tech giant is expected to unveil its latest iPhone equipped with AI applications, along with updates to the Apple Watch and AirPods.
The head of Huawei’s consumer and automotive technology group, Richard Yu, posted on Weibo on Monday, teasing the launch of the tri-fold phone, which has a screen that can be folded out three times. Besides a new smartphone, Huawei is also expected to unveil new wearables, like its smartwatch, and new tablets.
Huawei started accepting orders for the Mate XT on Sept. 7, and it had already received more than 3 million preorders as of time of publication, according to Huawei’s website. The phone officially goes on sale on Sept. 20—the same date that Apple’s new iPhones are expected to be available in stores.
Prices for both Huawei’s and Apple’s new phones are expected to be announced at their launch events.
Taking market share
Huawei has been gaining market share at the expense of Apple ever since it launched its Mate 60 Pro, a 5G phone featuring a fairly advanced chip, in late August last year. The phone surprised analysts and U.S. officials who had thought export control measures would curtail Chinese tech firms like Huawei from producing such chips at scale.
That phone was celebrated by state media in China, and earlier this year Huawei followed up with a new phone, the Pura 70 series, which also features a similarly advanced chip.
Analysts have speculated that China, which has been barred from procuring cutting-edge chipmaking equipment, has optimized older equipment to churn out these more advanced chips. And while it may be more expensive to do that at scale, Huawei’s new phones show Chinese companies may be willing to bear the production costs.
A recent report on the Chinese smartphone market from IDC, a market intelligence firm, showed Huawei in second place with 18.1% of market share in the second quarter of this year—a slice that represented 50.2% year-on-year growth. In contrast, Apple came in sixth. The report noted that despite price promotions, Apple still saw a 3.1% year-on-year decline.
Data from Counterpoint Research, another market research firm, also showed the recent contrasting fortunes for Apple and Huawei in the Chinese market. Counterpoint’s report had Apple in second place with a market share of 15.5% in the second quarter of 2024, but that’s down 5.7% year on year. Huawei had a market share of 15.4% for the same period, which was up 44.5% year on year.
Apple figures
Apple’s own quarterly results for the three months ended June 2024 showed a 6.5% decline in sales year on year to $14.7 billion in the Greater China market, which includes mainland China, Hong Kong, and Taiwan. Measured over the nine-month period ended in June 2024, Apple’s sales in Greater China declined 9.7% year on year.
Analysts attribute Apple’s struggles in China at least in part to the increasing rivalry between the U.S. and China. Against the backdrop of Washington’s tighter export control measures, Beijing has been supporting a shift away from Western technology toward domestic innovation. And that sentiment may apply to consumer devices as well, with Beijing previously asking government officials to stop using non-Chinese phones for work.
Apple’s bid to wrest back market share in China may be further hampered even before its launch owing to Beijing’s strict rules around generative AI technology. Such regulations mean the American company’s latest tech offerings in the iPhone 16 won’t be available in China.
“Huawei may still face some production restrictions in its upcoming new launch, but a breakthrough in the form factor will tell the consumers that it’s still the tech leader,” said Will Wong, senior research manager at IDC’s Asia-Pacific Client Devices Group. “This will further strengthen Huawei’s brand image, especially since Apple’s upcoming AI features will be absent in China in the short term.”
