Apple is set to launch its most anticipated smartphone in years, the iPhone X, but it now faces a fierce challenge from domestic giant Huawei in the Chinese market. In a recent development, Huawei unveiled its new Mate 10 series, aiming to solidify its position as China’s top smartphone brand and elevate its global image as a premium device manufacturer.
Over the past two and a half years, Apple has seen its market share in China steadily eroded by local players like Huawei. The company hopes the iPhone X will re-engage Chinese consumers, with the device expected to hit stores next month. Meanwhile, Huawei believes the Mate 10 will excite users with features similar to the iPhone X, such as an OLED full-screen display and AI capabilities like image recognition, all at a more affordable price.
According to Counterpoint Research, Huawei surpassed Apple in sales volume during June and July this year, becoming the world’s second-largest smartphone maker. However, the firm noted that Huawei may not retain the number two spot in the second quarter due to potential sales declines, while Apple could recover in the second half of the year.
Despite this, Apple's market share in China has dropped from 14% in 2015 to 10% this year, while Huawei rose from 14% to 18%. Huawei’s consumer business CEO, Yu Chengdong, said the company has evolved from being "a nameless player" five years ago to one of the top three globally today. He emphasized Huawei's ambition to succeed in the high-end smartphone segment.
At a press event in Munich, Germany, Huawei launched the Mate 10, with prices starting at 699 euros for the standard model and 799 euros for the Pro version. Prices in China and other regions will be announced later. In comparison, the iPhone X starts at $999 in the U.S., with a starting price of 8,388 yuan in China.
After dominating the telecommunications equipment market, Huawei expanded into smartphones several years ago, competing with giants like Ericsson and Nokia. Last year, Yu set a goal for Huawei to become the world’s largest smartphone maker within four to five years, though he later downplayed the target, focusing instead on the high-end market.
In the high-end segment, where Apple still leads, Huawei has made significant progress. In the first half of 2017, Huawei shipped over 6 million units of its previous flagship, the P10. According to Canalys, the average selling price of Huawei phones has been rising, with higher-priced models making up a larger share of total sales.
Although Apple still dominates the high-end market in China, Huawei is gaining ground. In the first half of 2017, Apple held 61% of the high-end market (prices above $400), compared to Huawei’s 16%. But Huawei is pushing hard, leveraging its strong partnerships with global operators and its focus on AI-driven features.
The iPhone 8 faced lukewarm reception in China, and the iPhone X might face supply issues. Apple has not commented on these reports. Meanwhile, Huawei continues to challenge Apple, recently mocking the iPhone X’s facial recognition feature in a viral video, claiming the Mate 10 is the real smart phone.
Huawei emphasizes AI as the key feature of the Mate 10, which uses its own chip with a neural processing unit designed for AI tasks like image recognition. The phone can automatically adjust camera settings based on the subject, whether it's a person or a landscape.
Counterpoint’s Peter Richardson noted that both Huawei and Apple are among the few manufacturers offering advanced AI features. As competition intensifies, the race for dominance in the smartphone industry shows no signs of slowing down.
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