BEIJING () – Huawei, which is facing US sanctions, unveiled an 8-inch (20-centimeter) folding smartphone on Monday to showcase its technical capabilities, but said it would only be sold in China.
Mate X2 highlights challenges for Huawei Technologies Ltd. after Washington cut off access to US processor chips and Google services. Last year, Huawei dropped from sixth-selling global smartphone brand to sixth place.
Huawei says the Mate X2, its third folding phone, has sharper images and better sound for movies and games. It works on the most advanced Huawei processor, the Kirin 9000.
The phone offers a “truly immersive experience,” said Huawei Yu President Richard Yu at the launch of the online event.
Huawei, the first Chinese technology brand in China, was shaken by the fact that in 2019 it was placed on the export blacklist by then-President Donald Trump as a security risk, which the company denies. Huawei sold its Honor smartphone brand at cheap prices in November to focus resources on higher-end models.
According to Yu, the Mate X2 will start at 17,999 yuan ($ 2,785).
Monday’s launch “says a lot about how it still wants to honk its technological advancement, although commercially speaking, its shipments will be severely curtailed,” IDC’s Bryan Ma said in an email.
Executives have previously said that Huawei stored chips and other components in preparation for possible restrictions in the United States. It is not clear how long these stocks may last.
Huawei has designed the Kirin line to power its most advanced smartphones, but relies on external manufacturers in its production, including Taiwan’s TSMC.
The Trump administration increased sanctions last year by blocking TSMC and other global producers from using US technology to make chips for Huawei, including those proposed by the company.
Chinese officials have accused Washington of abusing national security complaints to curb rising technology competitors. Huawei denies allegations that it could facilitate Chinese spying.
Excluding pre-installed music and other Google services, sales of Huawei smartphones, including Honor, fell 22% to 188.5 million last year, Canalys said.
Huawei founder Ren Zhengfei said on February 9 that he did not expect new US President Joe Biden to lift Trump’s sanctions, but expressed confidence that the company could survive. Huawei, headquartered in Shenzhen, southern China, is also the world’s largest manufacturer of telephone switching equipment.
Huawei’s smartphone unit is increasingly dependent on its domestic Chinese market, which accounts for more than 70% of sales, up from 50% in 2019. The loss of Google services has had no impact in China, where they are unlicensed and Huawei is already using local alternatives.
China’s ruling Communist Party has spent billions of dollars trying to build its own chip industry. But domestic manufacturers lack chip technology for Huawei’s most advanced products.
“The bigger question is rather how long their current supply of components will last,” Ma told IDC.
Huawei has not yet announced sales and profits for 2020, but the founder of Ren said that they are better than in the previous year. Huawei said revenue for the first nine months of 2020 rose 9.9% to 671.3 billion yuan ($ 100.4 billion).
Huawei Technologies Ltd.: www.huawei.com