Huawei’s increasingly blatant return to the Chinese smartphone market is reportedly starting to cause serious problems for Apple. The firm is already reporting a 13% drop in its shipments ofiPhone in the region… and this dynamic could cost the brand dearly.
30 %. This is the weight of the Chinese market in Apple’s overall turnover for the first quarter of its fiscal year 2024, the results of which were recently revealed. A substantial share of revenue which is increasingly threatened by the return from the dead of Huawei in its original market and in the smartphone field.
Apple soon in difficulty on the Chinese market?
We indeed learned, at the beginning of February, that Apple saw a 13% drop in its iPhone shipments in China in its first quarter of 2024. And according to certain market observers, including the ever-present Ming Chi Kuo, this dynamic could increase this year. According to the TF International Securities analyst, Huawei would not, however, be the only cause. For him, Apple’s main problem would be the appetite of Chinese consumers, at least those interested in premium smartphones, for folding models. The latter would therefore have no desire to opt for an iPhone.
This position is not shared by the analysis firm IDC, which for its part believes that Huawei would indeed be the primary cause of Apple’s recent disappointments in the Chinese market. Last September, Trendforce also indicated that the Apple firm would face several challenges in 2024 with regard to iPhone sales in China… and Huawei’s comeback in this area was mentioned as being one of them.
Huawei is getting back on track… somehow
That being said, Huawei’s return to the smartphone market, primarily in China, faces a significant obstacle. Due to the American embargo, the firm can no longer count on TSMC for the engraving of its HiSilicon Kirin processors. Instead, Huawei has been teaming up for several years with the Chinese founder SMIC… which is however not capable of delivering chips as advanced as those from TSMC, and which is not yet able to produce them at sufficiently low prices.
SMIC should therefore be content to launch the production of 5 nm chips during the year 2024 (compared to 3 nm at TSMC), and at prices 50% higher than those offered by its competitor. Enough to disadvantage Huawei, which will likely be forced to pass these costs on to the final price of its next high-end smartphones. Difficult in these conditions for the firm to do as much harm as it would like to iPhone sales.
Huawei may have been heavily impacted by American sanctions prohibiting it from using Google services on its smartphones, but the Chinese manufacturer is far from having said its last word. Indeed, it continues to design high-quality phones with its operating system and its in-house interface: Harmony OS and EMUI. For those who are more cautious, Google services are still available on some Huawei smartphones. We take stock of our selection of the best Huawei smartphones of 2022.
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Source : WCCFTech
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