Can Mate 10 Help Huawei Overtake Apple Inc. In Market Share?

Updated on

Chinese smartphone maker Huawei is doing considerably well lately, possibly well enough to uproot Apple in terms of the market share going forward. The top research firm IDC expects the Chinese company to overtake the U.S. firm in global market share either this year, or in 2018.

According to the IDC data, Huawei shipped 38.5 million units in the second-quarter, capturing 11.3% market share. On the other hand, Apple shipped 41 million iPhones to enjoy 12% market share. Speaking to CNBC, Francisco Jeronimo, research director for European mobile devices at IDC, said “Huawei is today the biggest challenger to Apple and Samsung. Indeed, they are growing very fast. They will probably overtake Apple in the smartphone business, either this year or next year.”

It is not just bad news for Apple, Samsung too is on Huawei’s radar as the Chinese company aims to be the number one. Other analysts too believe that Huawei might overtake Apple temporarily, but IDC expects it to be a permanent change.

What is even more threatening is the fact that along with increasing the number of units sold, Huawei is also working on creating value “because for Samsung or for any smartphone maker, it’s not about shipping boxes anymore, it’s about making money. And we are seeing the prices going up and up,” the expert said.

Over the past two years, Huawei has launched phones at different price points, including high-end phones to challenge Samsung and Apple. According to the market research firm Strategy Analytics, Apple and Samsung together accounted for 94% of the profits in the smartphone market in 2016, and in the first-quarter of 2017, the U.S. firm alone accounted for 83.4% of the profits.

Jeronimo, however, expects Huawei’s new smartphone AI chip could prove a game changer. Apple’s A11 chips that power the newest iPhones come with a dedicated AI circuitry, but Huawei’s Kirin 970 chip, which will power its next-gen phones, would be better as they are claimed to have a dedicated Neural Processing Unit.

Jeronimo believes that if Huawei’s new chip does boost the smartphone’s capabilities, it could help the company to push the prices higher.  Huawei, who does appear confident in its AI chip, already took a jab at the iPhone X, claiming its Huawei Mate 10 (launched today), would be the “the real AI phone.”

Launched on Monday at an event in Munich, Huawei Mate 10 are being claimed to come with high-end cameras, screens and batteries. In terms of price, Huawei’s upcoming phones are about 15-30% cheaper than similar phones from Apple and Samsung, notes Reuters.

Huawei Mate 10 and Mate 10 Pro are being pitched against Apple’s latest models. The Mate 10 and Mate 10 Pro sports 5.9-inch and 6-inch edge-to-edge displays respectively, along with fast-charging batteries that last longer in a single charge. Analysts also see the latest Huawei phones matching the quality that we are used to from Apple and Samsung.

Speaking to Reuters, CCS Insight mobile analyst Ben Wood, said the Mate 10 “line ticks all the boxes in terms of screen size, high-quality camera, powerful processor and slick design – competing with rival products from Samsung and to some extent, Apple.”

Signup to ValueWalk!

Get the latest posts on what's happening in the hedge fund and investing world sent straight to your inbox! 
This is information you won't get anywhere else!