Huawei Technologies Co and Xiaomi Corp are raising the stakes in China’s smartphone arena just days before Apple Inc’s first foray into the foldable category.
Huawei on Sept 7 will unveil the latest edition of its ultra-premium trifold device, the Mate XT 2, which has two folding mechanisms. The successor to the Mate XT released two years ago, this new device advances the complexity of engineering and combines a regular smartphone and a large-screen tablet into one. It’ll be the first to feature Huawei’s new LogicFolding chip design philosophy, as the company seeks novel ways to advance performance.
Later in the evening, the Xiaomi 18 Fold will mark another step from a Chinese manufacturer toward greater reliance on domestic suppliers. The new handset will run on memory from homegrown champion CXMT Corp and Xiaomi’s self-developed Xring O3 processor. It also features a passport-like design that mirrors what the first foldable iPhone from Apple is expected to look like.
The defensive action from two of China’s top brands underscores the threat and opportunity that Apple’s entry into the niche but premium foldable segment represents. Expected to be priced at more than US$2,000 (RM8,089), the foldable iPhone will bring new attention to these devices, which Chinese makers and global shipments leader Samsung Electronics Co have been selling for years. In China, foldables have been a resilient bright spot in an otherwise declining market.
"Apple has the world’s biggest premium device installed base. Its foldable will sell well and rapidly grab market share,” Counterpoint analyst Ivan Lam said. He expects the new handset to spur wider adoption among consumers, with spillover effects that also lift demand for rivals’ devices as well.
Xiaomi’s profit has declined for three consecutive quarters as the company worked to reduce shipments of unprofitable low-end devices. Huawei, though still posting shipment growth, also saw its profit decline in the first half this year in part because the company was forced to hoard more components to fend off rising memory costs. Huawei joined Xiaomi and Honor Device Co in a fresh round of price hikes earlier this month, local media Jiemian reported.
Smartphones are headed for their worst contraction on record this year, with shipments likely to decline 14%, Counterpoint data shows. Chinese smartphone makers are among those worst hit due to their outsize exposure to budget devices that are least able to digest the cost of surging component prices. To escape that crunch, most brands are now heavily promoting the premium segments, such as foldables, in order to raise their average selling prices.
Getting out a couple of days before Apple’s splashy new product event on Sept 9 gives brands the chance to own the spotlight at least momentarily. Apple could grab a quarter of the global foldable market this year and claim the No.1 spot with a 41% market share next year, according to projections by Smart Analytics Global. – Bloomberg
