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BEIJING – Huawei is struggling under US sanctions and Huawei on Monday unveiled a folding smartphone with an 8-inch (20 cm) wide screen to show off its technical prowess, but said it would only be sold in China.
The Mate X2 highlights the challenges for Huawei Technologies Ltd. after Washington cut off access to U.S. processor chips and Google services. Last year, Huawei dropped from the top-selling global smartphone brand to sixth place.
Huawei says the Mate X2, its third folding phone, has sharper footage and better sound for movies and games. It runs on Huawei’s most advanced processor chip, the Kirin 9000.
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The phone offers an ‘immersive experience’, Huawei’s president of the consumer unit, Richard Yu, said during an online launch event.
Huawei, China’s first global technology brand, was hit by being blacklisted for export in 2019 by then-President Donald Trump as a security risk, an accusation the company denies. Huawei sold its affordable Honor smartphone brand in November to focus resources on higher-end models.
The Mate X2 will start at 17,999 yuan ($ 2,785), according to Yu.
Huawei is struggling under US sanctions and unveiled a folding smartphone with an 8-inch (20 centimeters) wide screen to show off its technical prowess, but says it will only be sold in China.
Monday’s launch “says a lot about how it still wants to trumpet its advances in technology, even if its transmission will be commercially hindered,” Bryan Ma of IDC said in an email.
Drivers earlier said Huawei had piled up chips and other components in preparation for a possible US cut-off. It is not clear how long the stock can last.
Huawei has designed the Kirin line that offers its most advanced smartphones, but relies on outside manufacturers, including the TSMC of Taiwan, to make it.
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The Trump administration tightened sanctions last year by blocking TSMC and other global manufacturers from using U.S. technology to make chips for Huawei, including those designed by the company.
Chinese officials accuse Washington of abusing national security complaints to suppress rising technology competitors. Huawei denies allegations that it could possibly facilitate Chinese espionage.
Without Google Music and other services pre-installed, Huawei’s smartphone sales, including Honor, fell 22% to 188.5 million last year, according to Canalys.
Huawei founder Ren Zhengfei said on February 9 that he did not expect new US President Joe Biden to lift Trump’s sanctions, but that he was confident the company could survive. Headquartered in Shenzhen, southern China, Huawei is also the world’s largest manufacturer of telephone switching equipment.
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Huawei’s smartphone unit is increasingly dependent on the Chinese China market, which accounts for more than 70% of sales, compared to 50% in 2019. The loss of Google services had no impact in China, where it is not licensed and Huawei already have local alternatives.
China’s ruling Communist Party has spent billions of dollars to build its own chip industry. But local manufacturers do not have the technology to make chips for Huawei’s most advanced products.
“The bigger question is more about how long their current inventory components will last,” IDC’s mother said.
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Huawei has not yet reported sales and profits from 2020, but Ren, the founder, said it was better than the previous year. Huawei said revenue for the first nine months of 2020 rose 9.9% to 671.3 billion yuan ($ 100.4 billion).