Huawei's Smartphone Resurgence Puts Pressure on Apple in Chinese Market

In a remarkable turnaround, Apple Inc's AAPL, once arch nemesis Huawei Technologies surged ahead in the smartphone market in China. 

The company's recent release of a smartphone equipped with a cutting-edge chip has been a game-changer, pushing it closer to the top five smartphone brands in the nation. Huawei looks to double its smartphone sales in 2024, aiming to ship 60 to 70 million units.

Also Read: Team Xi Jinping Willing To Provide Apple 'More Opportunities' As Battle With Homegrown Huawei Heats Up

According to Counterpoint Research, Huawei's smartphone sales in China skyrocketed by 37% year on year, capturing a market share of 12.9%, a significant jump from 9.1% the previous year, CNBC reports.

Huawei reported a 118% growth in net profit to 26.4 billion yuan ($3.6 billion) in the September quarter and a slight rise in sales to 145.7 billion yuan. The results reflect initial sales of Mate 60 Pro, which began shipping in late August, Bloomberg reports.

Huawei launched the Mate 60 Pro, housing a 7nm processor made by Semiconductor Manufacturing International Corp. During the first six weeks post-launch, 1.6 million units were sold, per Counterpoint.

Previously, Huawei faced a steep decline after U.S. sanctions initiated in 2019. 

While Huawei experienced robust growth, its competitor, Honor, the leading smartphone brand by market share, saw a modest 3% increase in sales. 

Other major players, including Vivo, Oppo, and Apple Inc AAPL, faced double-digit declines. Counterpoint did not disclose the exact number of units sold by each company.

With Huawei's resurgence, Apple might face renewed challenges. Analysts speculate that if Huawei integrates its new chip into mid-range smartphones, it could further disrupt the market dynamics. 

"Introducing the new Kirin chipset in its mid-range phones could redefine the competition among leading brands," commented Lucas Zhong, a research analyst at Canalys.

Analysts, including Haitong International Securities's Jeff Pu, have estimated Huawei could build up to 70 million smartphones using its own Kirin chips in 2024 compared to the roughly 220 million iPhones that Apple ships annually.

Despite Huawei's success, the overall smartphone market in China witnessed a 14% decline in shipments in 2022, attributed to the ongoing COVID-19 restrictions and subdued consumer spending. However, Canalys anticipates a recovery, suggesting that the market downturn might have reached its nadir in 2023.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.