“Huawei’s high-end smartphones will return,” Richard Yu Chengdong, CEO of the consumer business and intelligent car solutions division, said at the annual developer conference in Dongguan last week. Huawei introduced its HarmonyOS 4 operating system at the event.
Mr. Yu spoke optimistically after Huawei returned to the top 5 largest smartphone manufacturers in China in the second quarter of 2023, according to research firm IDC.
Previously, the company surpassed Samsung Electronics to become the world's No. 1 phone brand in the second quarter of 2020 but was eventually strangled by the US embargo.
Huawei said HarmonyOS 4 integrates the Pangu generative AI model to provide ChatGPT-like services such as automatic message composition and image generation. The OS also improves support for other devices such as smart electric vehicles, an important area the company has been targeting in recent years. At the conference, Yu shared that HarmonyOS has connected to more than 700 million devices and has more than 2.2 million developers.
The latest development reflects how Huawei has been working to shore up its global operations as US sanctions continue to bite. Media reports say the Biden administration wants to cut off Huawei’s access to all US suppliers.
According to Counterpoint senior analyst Ivan Lam, the latest version of HarmonyOS is extremely important to Huawei's smartphone strategy because it wants to use software advantages to compensate for hardware shortcomings.
HarmonyOS was launched in August 2019, three months after Huawei was placed on Washington's Entity List, which banned the Chinese company from buying software, chips and other technology from the US, including Google's Android platform.
According to Mr. Ivan Lam, Huawei maintained a market share of 9 to 12% in its home country over the past year. Huawei's smartphone market share in China grew 58% in a year thanks to a recovery in the pace of product launches. If the company can maintain a stable market share, the growth momentum will continue despite the overall decline in the market, the analyst commented.
According to Will Wong, senior research manager at IDC Asia- Pacific , Huawei shipped a total of 14.3 million smartphones in China in the first half of this year, up nearly 40% compared to the same period in 2022.
One of the main reasons, Mr. Wong said, is that Huawei has optimized its supply chain after years of being negatively affected by the US embargo.
However, Huawei has not launched a new 5G smartphone since late 2020. The company released its P series smartphones again in April after a hiatus of more than a year. The Mate series was introduced in September 2022 after skipping the 2021 update. Both models also only support 4G.
Reuters sources revealed that Huawei plans to announce a 5G smartphone by the end of 2023 due to receiving new chip supplies domestically.
While some supply chain issues and the use of domestic components may be resolved, Mr. Lam said there are still uncertainties surrounding the procurement of the latest cameras and 5G chips, and that is not enough to bring Huawei back into the top 3.
(According to SCMP)
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