According to a report from IJIWEI, there are recent indications that Huawei’s P70 series and smartphones with smaller foldable screens are set to be launched in the first half of this year, with the Kirin 5G chip making a comprehensive return.

Citing information from a blogger, Huawei’s return to the top spot in China’s market in the first week of 2024 is attributed to the outstanding performance of the Nova 12 series. In addition to this success, the first half of this year will witness the release of new models such as the P70 series flagship for imaging and compact foldable screen devices. The Kirin 5G platform is expected to make a full comeback.

In the first half of 2024, Huawei plans to unveil the P70 series and devices with smaller foldable screens, all powered by the Kirin 5G platform. It is reported that the P70 series will feature the Kirin 9010 chip. Looking at Huawei’s recent releases, the Kirin 5G platform is set to cover a broad spectrum, including the Mate series, P series, and nova series, among other mid-to-high-end product lines.

Analyst Ming-Chi Kuo from TF International Securities revealed that Huawei’s smartphone shipments are expected to reach 60 million units in 2024, making it the fastest-growing brand in the industry. Kuo also mentioned that due to Huawei adopting the new Kirin 5G platform, Qualcomm’s System-on-Chip (SoC) shipments to Chinese smartphone brands are anticipated to decrease by 50-60 million units in 2024 compared to 2023.

(Image: Huawei)

Due to consumer spending pressures this year, the smartphone market is not as robust as before. With Apple facing strained relations with China, market sentiment continues to be pessimistic about Apple’s prospects.

Recently, citing from a report from Jefferies Financial Group’s analyst, Bloomberg stated that the sales volume of Apple’s latest products in China is expected to decline by 30% compared to last year in 2024, potentially experiencing a double-digit decline for the whole year.

The Wall Street Journal once reported that last year, the Chinese government announced its restriction on officials using iPhones, with at least eight provinces instructing officials to cease using iPhones.

This restriction not only applies to government agencies but also extends to state-owned enterprises, including large entities in China’s power generation, harbor construction, mining, manufacturing, education, and investment markets.

In addition to political restrictions, Apple is also facing pressure from Chinese competitor Huawei. Analysts from Jefferies Financial Group previously stated that sales of Huawei’s Mate 60 Pro surpassed the iPhone 15.

In 2023, Huawei held the highest market share in the Chinese smartphone market, growing by approximately 6% compared to the same period in 2022, while Apple’s market share in China declined by 4% year-on-year.

Patriotic Enthusiasm Supports Local Smartphone Brands

Driven by “patriotic enthusiasm,” according to Jefferies’ estimation, Huawei’s smartphone shipments last year reached 35 million units, falling below the expected 40 million, possibly due to constraints in component supplies.

The Huawei Mate 60 Pro features a SMIC-manufactured 7nm processor tailor-made for the domestic market. Huawei continues to develop and expand its HarmonyOS operating system, competing with iOS and Android.

Yet, according to MacDailyNews, Huawei has allegedly exaggerated the capabilities of the Mate 60. In reality, its processor specifications lag behind Apple by several generations.

The “Kirin 9000S” is a 7nm chip, with a Geekbench 6 single-core score of 1,267 and a multi-core score of 3,533. In comparison, Apple’s A17 Pro features a 3nm chip, scoring 2,902 in Geekbench 6 single-core and 7,221 in multi-core tests.

The Huawei Mate 60 falls behind even Apple’s entry-level third-generation iPhone SE. The latter is equipped with the 5nm A15 Bionic chip from September 2021, scoring 2,237 in Geekbench 6 single-core and 5,173 in multi-core tests.

Smartphone Price Reduction Fails to Boost Sales

To salvage the market, iPhone 15 Pro and iPhone 15 Pro Max witnessed a substantial 16% price reduction on the Pinduoduo e-commerce platform during the first week of 2024, with similar discount levels observed in December. However, analysts from Jefferies believe that these discounts will not stimulate sales growth.

As iPhone sales constitute approximately 52% of Apple’s total revenue, China has consistently represented Apple’s most crucial international market.

In the face of the competitive pressure in the Chinese market this year, TrendForce analysis suggests that Huawei’s successful sales will exert sales pressure on Apple, which also targets the high-end market in China.

Therefore, TrendForce is not optimistic about the production forecast for Apple in 2024, estimating the annual production volume to be around 215-225 million, slightly lower or flat compared to the previous year.

In terms of regional market operations, Apple continues to increase its production share in India, aiming to offset the lost market share in China through the growth of the high-end market in India. It is estimated that by 2025, the production share in India will further increase to 25-30%.

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(Photo credit: Huawei)

In a strong push for foldable smartphones, reportedly, Huawei has issued rush orders to its supply chain lately. The shipment target for foldable smartphones this year is set at ten million units, marking a nearly threefold increase from the 2.6 million units shipped last year.

Previous rumors suggested that Huawei was considering lowering its foldable smartphone shipment targets for this year. However, the industry sources from related supply chain emphasizes that not only did Huawei refrain from reducing orders, but it significantly increased them.

According to Economic Daily News cited from supply chain sources, Huawei has set very ambitious goals for foldable smartphone shipments this year, aiming to increase from last year’s 2.6 million units to a range of 7 to 10 million units. This represents a nearly threefold increase, requiring additional support from various components.

Among them, the critical mobile phone component CIS, due to a rebound from the market downturn, has seen prices starting to surge. Main CIS supplier, Samsung, has raised prices by 25% to 30% this quarter.

To avoid the risk of escalating prices, CIS has become Huawei’s top priority for stocking up, primarily supplied by the Chinese CIS supplier, OmniVision. The substantial increase in overall shipment targets for foldable smartphone has driven a several-fold growth in CIS stockpiles.

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(Photo credit: Huawei)

In 2019, the U.S. Commerce Department blacklisted Huawei and over 70 of its subsidiaries, restricting China’s advancement in advanced chip development.

However, in August 2023, Huawei unexpectedly launched its new flagship smartphone, the Mate 60 Pro, featuring its self-developed 5G chip, hinting at Huawei’s breakthrough in the U.S. 5G chip restriction.

The release of this new smartphone swiftly dominated the high-end smartphone market in China, with Apple being the primary target. As Huawei plans to expand the market share of its high-end flagship series in 2024, targeting the domestic market in China, the product is poised for direct competition with Apple.

The performance of Apple’s smartphones in the Chinese market next year will be a focal point of industry attention.

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(Photo credit: Huawei)

Chinese iPhone assembly contractor Luxshare Precision is set to officially acquire the controlling stake of Pegaglobe (Kunshan), the iPhone assembly plant under Pegatron. This series of acquisitions will provide Luxshare with a stronger competitive advantage against Foxconn. Concurrently, Luxshare is reinforcing its component layout to enhance its capability to expand iPhone orders.

Following the acquisition of Wistron’s Jiangsu and Kunshan plant, Luxshare has now secured the controlling stake of Pegaglobe (Kunshan), a subsidiary of Pegatron. This marks another acquisition of China’s plants involved in manufacturing iPhone for Taiwanese companies.

According to UDN citing from industry insiders,  Luxshare’s acquisition of Pegaglobe (Kunshan) is likely to have received Apple’s approval. Luxshare has consecutively broken the pattern of iPhones being solely manufactured by Taiwanese companies, suggesting that Luxshare has the opportunity to reshape the landscape of iPhone manufacturing in the future.

Having acquired iPhone manufacturing plants in China from Wistron and Pegatron, Luxshare not only gains more market share in manufacturing but also expands its presence in the upstream iPhone component supply chain. This ongoing integration of upstream components enhances Luxshare’s capability to secure more iPhone orders.

In the past three years, Luxshare has been consistently acquiring iPhone-related supply chain entities. In July 2020, Luxshare’s subsidiary, Lizhen Precision (Jiangsu), acquired Wistron Investment (Jiangsu) and Wistron InfoComm Manufacturing (Kunshan) for RMB 3.3 billion (approximately USD 467 million), marking the beginning of Luxshare’s acquisition of plants involved in iPhones assembly for Taiwanese companies.

Recently, Luxshare finalized an agreement with the global provider of connectivity and power solutions – Qorvo. Luxshare will acquire Qorvo’s testing and packaging facilities in Beijing and Dezhou, with the transaction expected to be completed in the first half of next year. This move is seen as Luxshare’s effort to build a more comprehensive iPhone component supply chain.

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(Photo credit: Luxshare)