Huawei sticks to a low-key strategy, opting for understated smartphone launches.
Contrary to expectations, the recent Huawei Autumn 2023 Launch Conference took an unexpectedly subdued tone. The much-anticipated Mate 60 Pro, believed to be the star of the show, received only a brief mention, leaving enthusiasts and industry watchers surprised.
This strategic shift can be deciphered by considering Huawei’s established strong brand loyalty among Chinese consumers. Previously hampered by the unavailability of 5G chips due to U.S. trade restrictions, Huawei has managed to overcome these hurdles. The recent successful sales of its new devices in China suggest that a flamboyant presentation of specifications at launch events might not yield substantial benefits. In fact, it could inadvertently be interpreted as a provocation amid the escalating tensions between the U.S. and China.
Therefore, in light of the strained bilateral relations, it is projected that Huawei will continue adopting a discreet approach, with future smartphone releases likely avoiding the spotlight at launch events.
Maturation of the smartphone industry poses challenges for brands seeking innovation.
Despite Huawei’s success in developing its own 5G-compatible chips amidst U.S. sanctions, the latest smartphone lack groundbreaking features. Innovations such as satellite communication or advanced camera modules (with periscope lenses and variable apertures) are conspicuously absent. Even in the flagship Mate 60 RS model, the emphasis shifts to the distinctive ceramic material on the back shell.
Anticipated rise in China’s domestic production ratio.
Before the U.S. sanctions, Huawei heavily relied on foreign suppliers for smartphone components, including RF, baseband, memory, and sensor chips, complementing its self-developed Kirin chips. However, the restrictive policy have compelled Huawei to shift its dependency to domestic Chinese manufacturers.
In the nearly three-year period from the imposition of U.S. sanctions to the recent release of Huawei’s new 5G smartphone, the industry expected Huawei and its supply chain to suffer severe setbacks. However, the China-made ratio of components in Huawei’s new smartphone currently stands at an impressive 90%, with only the DRAM incorporating SK Hynix products.
With Huawei’s return, it is poised to catalyze growth throughout its supply chain. The ongoing trajectory suggests a continual increase in the domestic production ratio of future devices in China.