New Huawei phone comes at crucial time for company
LONDON » Huawei’s new smartphone has an upgraded camera, its latest advanced chipset and a betterbattery. What itmaynot have outside the Chinese tech giant’s home market is very many buyers.
Huawei, which recently became the world’s No. 1 smartphone maker, on Thursday unveiled its Mate 40 line of premium phones, a product release that comes at a crucial moment for the company as it runs out of room to maneuver around U.S. sanctions squeezing its ability to source components and software.
The Mate 40 could be the last onepoweredby the company’s homegrown Kirin chipsets because ofU.S. restrictions inMaybarring non-American companies fromusingU.S. technology in manufacturing without a license.
Analysts say the company had been stockpiling chips before the ban but its supply won’t last forever.
“This is a major challenge to Huawei and it’s really losing its market outside of China,” said Mo Jia, an analyst at independent research firm Canalys. The latest U.S. restrictionsmean it “100% has closed doors for Huawei to secure its future components.”
Executives said this summer that production of KirinchipswouldendinmidSeptember because they’re made by contractors that need U.S. manufacturing technology. In a press preview this week ahead of the Mate 40’s launch, staff declined to answer questions on Huawei’s ability to source chips. The head of Huawei’s consumer business, Richard Yu, referred only briefly to the issue at the end of a virtual launch event Thursday.
“For Huawei, nowadays we are in a very difficult time. We are suffering from the U.S. government’s third round ban. It’s an unfair ban. Itmakes (the situation) extremely difficult,” Yu said.
Huawei, which is also a major supplier of wireless network gear, is facing pressure in a wider global battle waged between the U.S. and China over trade and technological supremacy. The U.S. government’s efforts tolobby allies inEurope to not give it a role in new high-speed 5G wireless networks over cybersecurity concernshas been paying off, with countries including Sweden and Britain blocking its gear.
Huawei phones are not widely available in the U.S., but they’re sold in Europe, the Middle East and Asia. The company climbed to the top of the global smartphone rankings this summer, knocking Samsung off top spot by shipping 55.8 million devices in the second quarter to gain a 20% share of the market, according to research firms Canalys and International Data Corp. But the performance was driven by strong growth in China while smartphone sales in the rest of the world tumbled due to the coronavirus pandemic.
Analysts say it will be hard forHuawei to remain No. 1.