Huawei steals the show from Apple with this folding smartphone

Apple is used to being the boss in the smartphone world every fall when the tech giant launches its latest iPhones. This year, however, one of its biggest competitors in China has tried to rewrite the script.

Just hours after the tech giant unveiled the iPhone 16 on Monday, Chinese company Huawei tried to steal the show by unveiling a new smartphone, the Mate XT. A $2,800 smartphone that is a world first in the foldable phone market with its “tri-fold” design.

Read also

Apple introduces new iPhones – why EU users have to do without new AI features

Huawei is confident in the smartphone game against Apple

To make its challenge even clearer, Huawei will launch the Mate XT in stores on September 20, the same day the iPhone 16 will be available in China. Huawei's new smartphone has already registered nearly three million pre-orders, which do not require a deposit.

VCG/Getty Images

This shows how confident Huawei is in challenging Apple in the smartphone game. The Silicon Valley company is going through a difficult time in its most important international market.

Apple has been observing concerns about iPhone sales in China for some time. Data from market research firm Counterpoint, for example, shows that iPhone sales fell 19.1 percent year-on-year in the first quarter of 2024 and a further 5.7 percent in the second quarter.

It seems that Huawei has gained a large part of this lost market share. The Chinese smartphone maker saw a huge increase in sales of 69.7 percent in the first quarter of the year. In the second quarter, it rose again by another 44.5 percent.

Read also

Apple releases new operating system: Will my old iPhone still work with the new iOS 18?

Experts see Huawei at an advantage over Apple

Jamie MacEwan, senior research analyst at Enders Analysis, told Business Insider that the “eye-catching” Mate XT, despite targeting a “fairly small niche at the top end of the price scale,” was a sign of “Huawei's return in full force.”

The company has struggled for years with setbacks due to U.S. export controls that limited its access to key components.

However, in August 2023, it surprised the tech world by introducing the Mate 60 Pro, a smartphone with an advanced chipset sourced from Chinese chipmaker SMIC.

“The next flagship Mate refresh will have a greater market impact,” MacEwan added.

Apple, for its part, is banking on its new range of generative AI features – called Apple Intelligence – to trigger an upgrade cycle among consumers eager to try out the technology.

Gene Munster, managing partner at Deepwater Asset Management, believes that “AI will change everything, including the growth rates of the iPhone in the next few years.” Apple tried to reinforce this during its “Glowtime” event on Monday, where Apple Intelligence received a lot of attention.

NIC COURY/Getty Images

This also

Brussels takes a stand against tech giants: ECJ imposes billions in fines on Apple and Google

Apple's AI features won't come to China until 2025

Whether or not AI will trigger an upgrade cycle remains to be seen. However, what poses a major risk for Apple given the threat from Huawei is that its new AI features will not be introduced in China until 2025.

For this reason, Richard Windsor – an equity analyst and founder of market research firm Radio Free Mobile – believes the Huawei Mate XT will “probably sell very well”, particularly given the long wait for Chinese consumers to get their hands on Apple Intelligence.

“Apple's main selling point for 2024 is not relevant in the market where this battle is being fought,” Windsor told Business Insider US. “Apple is in retreat in China and will likely stay there.”

Apple seems ready to experiment with the iPhone form factor. A report from The Information in February said Apple has developed two prototypes of horizontally folding “flip phones,” although they are not expected to enter mass production until 2026.

Meanwhile, iPhones without AI may be harder to sell in China given the fierce competition.

“What will be difficult for Apple in China is to counter Huawei's momentum and get loyal Apple users to upgrade while China's economy is still struggling with lower growth,” MacEwan said.

One can expect Huawei to take advantage of the moment.

This also

Softbank is now betting on this European AI startup as an investment giant