Let's get one thing out of the way immediately: you shouldn't buy Huawei's trifold phone, the Mate XT. And that's alright, because you probably couldn't if you wanted to - while it's no longer exclusive to China, it's only on sale in a handful of countries, and not in the US or Europe.
Besides, I can reel off a list of major problems with the Mate XT: at almost $4,000 it's far too expensive, it doesn't have native support for Google apps (though you can get around that more easily than you might think), it's limited to 4G, and there are some pretty obvious reasons to worry about its durability. Any one of those individually would be a good reason to steer clear of buying the Mate XT. Taken together, they're insurmountable.
But this isn't a phone you're meant to buy, at least not outside China. It's a phone you're meant to gawk at on the internet, to marvel at Huawei's technological prowess, to ooh and ahh about its many and varied folds. This is Huawei showing off, proving to the world that it's still got it. And in fairness, it has.
As I sit and write this - more than six months after Huawei first released the Mate XT in China - it's still the only one of its kind. Rumor has i …
President Donald Trump’s administration has taken a tougher stance on Chinese technology advances, warning companies around the world that using artificial intelligence chips made by Huawei could trigger criminal penalties for violating US export controls.
The commerce department issued guidance to clarify that Huawei’s Ascend processors were subject to export controls because they almost certainly contained, or were made with, US technology.
Its Bureau of Industry and Security, which oversees export controls, said on Tuesday it was taking a more stringent approach to foreign AI chips, including “issuing guidance that using Huawei Ascend chips anywhere in the world violates US export controls.”
Chinese tech conglomerate Huawei is looking to take on semiconductor behemoth Nvidia with a new advanced AI chip. Huawei is making progress developing its latest Ascend AI GPU, the Ascend 910D, according to the Wall Street Journal, citing sources familiar. The company has been reaching out to other Chinese firms to find test partners, the […]
Banning Nvidia chips won't halt China's AI progress, analysts say.
Chinese firms are reducing reliance on Nvidia, finding alternatives like Huawei.
Banning H20 chip exports would 'make no sense,' according to Bernstein.
Banning the export of Nvidia chips is unlikely to stymie China's development of advanced AI, according to Bernstein analysts.
Nvidia notified investors in a new regulatory filing last week that it expects the Trump administration to require a license for exporting the type of powerful semiconductors used to build AI products to China. Analysts widely interpreted the license requirement as an export ban.
The US chip firm said it would incur $5.5 billion in charges related to inventory, purchase commitments, and reserves for its H20 chip model in the first quarter, which ends on April 27.
Nvidia designed its H20 chip to exactly fit with Biden administration limits on the power of chips that could be sold to Chinese companies, the aim of which was to curb China's AI progress. (A new congressional inquiry takes issue with this reaction to the regulations.)
"Banning the H20 would make no sense as its performance is already well below Chinese alternatives; a ban would simply hand the Chinese AI market completely over to Huawei," Bernstein analysts wrote in a note to investors Wednesday.
How Chinese AI progressed despite chip limits
Chinese companies have been reducing their reliance on Nvidia chips, according to the analysts. To do so they have found ways to perform model training on unrestricted edge devices, like personal computers and laptops. They've also moved much of the inference workloads, the AI-generated responses and actions, to Nvidia alternatives.
Chinese companies have also engineered ways for chips designed by their homegrown tech giant, Huawei, or other locally made chips, and Nvidia chips to be networked together, though software remains a challenge in fully converting from chip to chip.
"Our channel checks have shown that most companies are able to carry on without H20 chips," the analysts wrote.
Chinese companies with revenue from foundation model subscriptions — similar to US firms OpenAI or Anthropic — will have the hardest time converting from Nvidia chips to alternatives, since training models is more dependent on Nvidia's proprietary software CUDA.
One Chinese company required 200 engineers and six months to move a model from the Nvidia platform to Huawei chips, and it still only reached 90% of the previous performance, according to Bernstein.
Huawei presents the most formidable challenge to Nvidia in China.
"In the longer run, expect Huawei to keep closing the gap in performance and Chinese foundational models making up for compute deficiency with Deepseek-like innovation," the analysts wrote.
Chip supply, though, is likely to be constrained for the foreseeable future, they added, as Huawei, like most major players in the AI chips game, is somewhat dependent on production from Taiwan Semiconductor Manufacturing Company.
As the global artificial intelligence (AI) race presses on amid a US-China trade war, the Taiwan Semiconductor Manufacturing Company (TSMC)—a $514 billion titan that manufactures most of the world's AI chips—is warning that it may not be possible to keep its customers' most advanced technology out of China's hands.
US export controls require chipmakers to monitor shipments and know their customers to restrict China's access to AI chips. But in a recently published 2024 report, TSMC confirmed that its "role in the semiconductor supply chain inherently limits its visibility and information available to it regarding the downstream use or user of final products that incorporate semiconductors manufactured by it."
Essentially, TSMC expects that it plays too big a role in the semiconductor industry to stop all the possible unintended end-uses of the semiconductors it manufactures. Similarly, it appears impossible to track all the third parties determined to skirt sanctions. And if TSMC's hands are truly tied, that ultimately means that the US can't effectively stop the latest AI tech from trickling into China.
After 24 hours with Huaweiâs Mate XT â a.k.a. the worldâs first trifold smartphone â I have this to say for it: the novelty hasnât worn off.
Iâve tried the Mate XT twice before, first shortly after it launched last September, and then again in February after it was released outside of China. But now Huawei is ready to actually let me review its one-of-a-kind hardware, which at todayâs exchange rates would set you back just under $4,000.
Iâll be spending the next week with my SIM card in the Mate XT, as I get used to life with triple the usual space and none of the usual Google Mobile Services support, but one day in, I figured Iâd share my first â or is it third? â impressions and a bunch of pictures.
There are really three ways to use the XT: as a regular-ish phone with a 6.4-inch display, in a square shape that resembles other foldables and measures 7.9 inches, or fully opened into whatâs essentially a 10.2-inch tablet.
It feels a little unnatural to open at first. Since each segment folds in a different direction, it took me a few hours to get used to where I push and where I pull, and I spent most of that adjustment period worrying I w …
Taiwan Semiconductor Manufacturing Company (TSMC) may have to pay a fine of $1 billion or more to resolve a U.S. export control investigation related to a chip it made that was used in a Huawei AI processor, according to a report by Reuters. TSMC did not provide any further comments as it is now “in […]
Huawei has launched a new flip phone that upends the form factor, opening sideways rather than vertically to create a wider device with a tablet-esque aspect ratio. It’s the first Huawei phone to ship without Android app compatibility, and debuts the company’s in-house AI assistant, Harmony Intelligence — something the industry shouldn’t ignore, Nvidia’s CEO admits.
The Pura X looks similar to a Samsung Galaxy Flip or Motorola Razr when it’s closed, with a palm-sized design and a square cover screen below its triple camera. The giveaway that something’s up is that the hinge is on the phone’s side, not its top — flip that and you find a 6.3-inch display in a 16:10 aspect ratio, wider than other flip phones and closer to tablets in its proportions. It seems to be a way of splitting the difference between flip phones and larger book-style foldables.
This is also the first Huawei phone to leave Android behind for good. It runs the new HarmonyOS Next, which doesn’t use Android Open Source Project code and isn’t compatible with Android apps. The OS launched in November 2024 alongside the Mate 70 series, but owners of those phones were given a choice between Next or the Android-based HarmonyOS, whereas the Pura X is only available with the new software.
The Pura X is also the first phone to ship with Harmony Intelligence, an AI assistant based on Huawei’s in-house Pangu model and enhanced by DeepSeek. Huawei is also developing its own in-house Ascend AI chips, and this week Nvidia CEO Jensen Huang admitted that Huawei’s “presence in AI is growing every single year,” adding that “We can’t assume that they are not going to be a factor.” He also noted that US trade restrictions on the company have “done poorly,” calling Huawei “the single most formidable technology company in China.”
The Pura X is only available in China for now, where it starts at 7,499 yuan (around $1,037). Early teasers for the Pura X highlighting its wider aspect ratio gave the impression that it might be Huawei’s first commercial rollable phone. Lenovo has confirmed that its rollable laptop will go on sale this year, but the wait for a rolling phone continues.
"They have conquered every market they've engaged," Nvidia's CEO Jensen Huang said of Chinese tech giant Huawei.
Josh Edelson/AFP via Getty Images
Jensen Huang said that Huawei's "presence in AI is growing every single year."
"We can't assume they are not going to be a factor," Huang said.
Huawei has been using China-made chips in its flagship smartphone, the Huawei Mate, since 2023.
Nvidia's CEO Jensen Huang said he thinks the telecommunications giant Huawei is the "single most formidable technology company" in China.
Huawei's "presence in AI is growing every single year," Huang told the Financial Times in an interview published Wednesday.
"We can't assume they are not going to be a factor," Huang added.
Huawei was founded in 1987 by former People's Liberation Army engineer Ren Zhengfei. The Shenzhen-based company started as a reseller of telephone switch equipment but eventually started producing and selling its own telecom equipment.
This is despite the challenges Huawei has faced, particularly in the US.
President Donald Trump said in his first term that his administration wouldn't do business with Huawei, calling the company a "national security threat."
In May 2019, Huawei was added to a trade blacklist by the Commerce Department, meaning that the company could not buy parts and components from US companies without the government's approval.
Before leaving office in January 2021, the Trump administration revoked the licenses of companies that supplied materials to Huawei.
Those restrictions did not abate when President Joe Biden took over from Trump. In June 2021, Biden signed an executive order expanding the number of Chinese companies Americans are prohibited from investing in. Huawei was on the list.
In the final weeks of Biden's term, his administration imposed further export controls on China's semiconductor industry, targeting 140 firms, including Huawei and Semiconductor Manufacturing International Corp. This was the third time the Biden administration had sought to limit China's access to chips after levying restrictions in 2022 and 2023.
But those efforts appear to have only strengthened Huawei's push toward self-sufficiency. The company has been using locally produced chips in its flagship smartphone line, the Huawei Mate, since 2023.
Huang told the Financial Times that the US government's attempts to stifle Huawei have been "done poorly."
"They have conquered every market they've engaged," Huang said.
Representatives for Nvidia and Huawei did not respond to requests for comment from Business Insider.
Huawei is at the center of a fresh scandal in Europe, following reports that lobbyists representing the Chinese tech titan bribed members of the European Parliament (MEPs) to curry favor with lawmakers. After being cast out of the U.S. market over fears that its telecommunications equipment could be infiltrated by the Chinese government for nefarious […]
Huawei’s trifold Mate XT phone is launching outside of China, but it won’t come cheap. The world’s first and only phone that folds at two separate points in the display costs €3,499 (about $3,660) — and like other Huawei phones, won’t officially support any Google apps.
The Mate XT launched in China in September 2024. It features a dual-hinge folding display that gives users three different screen configurations: a 6.4-inch panel when closed, a 10.2-inch tablet-sized screen when fully opened, and a 7.9-inch display when only partially unfolded.
The trifold is also impressively thin, just 3.6mm thick at its thinnest point when open. That’s even thinner than the upcoming Oppo Find N5, which is also being promoted as the “world’s thinnest” foldable. That phone will be thinner than Huawei’s when shut, helped by only having two panels rather than three.
The 5,600mAh battery should be sufficient to last the day, even with the larger screen size, and the Mate XT supports wired or wireless charging. The rear camera looks impressive too, with a 50-megapixel main sensor joined by 12-megapixel ultrawide and periscope shooters. The big downside is that like other Huawei hardware, there’s no support for Google apps and services, including the Play Store, despite running Huawei’s Android-based EMUI software. Last year the company launched its own Android-free operating system, HarmonyOS Next, but the Mate XT has not yet been upgraded to that software, even in China.
I got the chance to try the Mate XT shortly after its September unveiling, and was struck by how sturdy it feels despite the delicate design. It’s a little unintuitive having to fold each screen segment in a different direction to close the phone, but that’s a small price to pay — at least compared to the rather large price you’ll have to pay just to own the thing.
Despite releasing pricing in Euros, so far the phone is only confirmed to release in Malaysia, Indonesia, the Philippines, UAE, Saudi Arabia, and Mexico, though more markets are “expected.” Huawei UK public relations specialist Elliot Mulley-Goodbarne did confirm to The Verge that it’s “not coming to the UK or US for the time being.” It’s launching in a single configuration, with 16GB of RAM and 1TB of storage.
The Mate XT launched alongside a new pair of open-ear earbuds called the FreeArc, the Band 10 fitness tracker, and a MatePad Pro 13.2 tablet with a matte OLED display.
Update, February 18th: Added confirmed launch regions and software.
Apple finally has an AI partner in China: Alibaba.
Alibaba will integrate its AI into iPhones in China, its chairman, Joe Tsai, said on Thursday.
Apple faces a tough task to turn around sliding smartphone sales in China that may go deeper than AI.
It looks like Apple has finally found a partner to bring its full vision of generative AI to China: Jack Ma's Alibaba.
Apple will be hoping the partnership, confirmed Thursday by Alibaba's chairman Joe Tsai, drives more iPhone sales in China. But its success is far from guaranteed at a time when the company is facing tough competition from domestic rivals like Huawei.
"Apple has been very selective. They talked to a number of companies in China, and in the end, they choose to do business with us," Tsai said in an interview at the World Government Summit in Dubai. "They want to use our AI to power their phones."
Apple has been searching for a local partner to bring the full version of its Apple Intelligence suite of features to Chinese consumers. Beijing's rules prevent it from bringing its partnership with ChatGPT maker OpenAI to the country.
As a result, Apple Intelligence has not yet been introduced to Apple's most important international market. While the Alibaba partnership brings that one step closer, it still has some regulatory hurdles to pass.
Some analysts predict that Apple Intelligence will boost the company's fortunes in China at a time when its smartphone sales are continuously sliding in the face of fierce competition from local smartphone makers such as Huawei, Xiaomi, and Vivo.
Last month, Apple reported an 11% year-on-year revenue drop to $18.5 billion in Greater China, adding further woes to the health of its sales in the region after a 7.7% drop there to $72.5 billion in its previous fiscal year.
In that time, market share has shifted toward domestic firms as their devices have begun to incorporate 5G capabilities that can rival those of top-end iPhones. These devices have also provided a made-in-China alternative that appeals to growing national sentiment in the country.
In the last quarter of 2024, for instance, Huawei saw its smartphone sales jump 15.5% year-on-year, per figures from research firm Counterpoint, following the release of its high-end Mate 70 series of smartphones in November. Apple's smartphone sales fell 18.2%.
Apple's China problems loom large
Apple Intelligence has not been rolled out in China yet.
Apple
The other uncertainty for Apple is whether any of its generative AI features will move the needle among consumers spending more carefully.
Counterpoint's associate director Ethan Qi noted last month that China's smartphone market saw a slowdown in the final quarter of 2024 — overall smartphone sales fell 3.2% year-on-year in the quarter — as "consumers adopted cautious spending behavior."
Though Apple is betting on generative AI to help trigger a fresh upgrade cycle, analysts have been left underwhelmed by what Apple Intelligence offers, raising concerns about the value consumers might see in the technology.
Following rumors of an Apple-Alibaba deal earlier this week, analysts at investment bank Jefferies wrote that they thought it "would be unlikely to boost sales" of the iPhone 17 in China.
While the analysts recognized that Alibaba's Qwen AI model has left a strong impression on the industry, having demonstrated "strong performance in global AI leaderboards," there are concerns that Apple will find it hard to use the model to leverage data from its own apps and deliver the "highly intelligent, personalized services" it seeks to offer.
Chinese iPhone users "rarely use any Apple apps" and choose to opt for local ones like WeChat and Baidu instead, the analysts added.
Markets have reacted positively to The Information's initial report that Alibaba and Apple had agreed to a partnership. On Wednesday, Alibaba shares in Hong Kong climbed over 8%.
Apple did not immediately respond to Business Insider's request for comment.
A partnership between Apple and Alibaba would not mark the first time the two companies have floated the possibility of working together.
In 2014, Apple CEO Tim Cook publicly addressed the prospect of a "marriage" between Apple Pay and Alibaba's payment platform, Alipay, by sharing his respect for the company's founder, Jack Ma. He said he likes to work with "those that "push us, and we like to push them."
"Those partners we work the best with, and I think Jack has a company that's exactly like that," Cook said. Some 11 years on, he'll hope that Alibaba can still be that company to Apple.
Apple reported an 11% decline in sales in the greater China region in the fourth quarter of 2024.
Justin Sullivan/Getty
Apple avoided a hit to its share price from DeepSeek, but it has another China-made problem.
iPhone sales in the country have fallen again.
An 11% slide in sales last quarter is raising concerns about Apple amid tough competition in China.
DeepSeek may not have triggered a sell-off panic for Apple, but the iPhone maker has another China headache.
While Apple avoided the pummelling handed to its Silicon Valley peers this week by Chinese AI startup DeepSeek, the company had its own China-related problems on Thursday as it reported an 11% year-on-year drop in revenue in the country to $18.5 billion.
The slide in last quarter's sales is a sign of deepening struggles for Apple in its most important international market — and is raising concerns among some investors and analysts who had forecast better results.
In its last financial year, Apple's net sales in Greater China decreased 7.7% from $72.5 billion the previous year. The year before that, net sales decreased by 2.2%. Understanding if the decline can be stopped is now key for Apple watchers.
During Thursday's earnings call, CEO Tim Cook took the 11% China decline head-on by explaining that "over half of the decline" was driven by changes in "channel inventory."
Apple CEO Tim Cook.
Justin Sullivan/Getty Images
He also had another explanation. "It's the most competitive market in the world," Cook said.
That competition has been a particular threat to Apple's smartphone sales in China, where domestic companies such as Huawei and Xiaomi have been enticing consumers with 5G-enabled devices that now appear to rival the capabilities of iPhones.
Figures from research firm Counterpoint show that in the last three months of 2024, Apple's smartphone sales fell 18.2%, while Huawei's grew by 15.5% as it was boosted by the launch of its latest high-end smartphone series, the Mate 70.
In a research note after Thursday's earnings, Logan Purk, senior analyst at Edward Jones, said that "sales in China were weak and will remain a point of debate among investors," particularly as Apple contends with "fierce competition in China for 5G phones."
That said, analysts also see an opportunity for Apple to counter the competition later this year once it rolls out one of its biggest bets to China: Apple Intelligence.
The tech giant's generative AI features, unveiled in June last year, are yet to be rolled out in China and are seen as a key driver of a huge upgrade cycle in iPhones in the future.
Dan Ives, a Wedbush analyst, said in a note on Friday that his firm expects growth to "markedly rebound" in China to "double-digits" year-on-year starting in the June quarter, with the "anticipated April rollout" of the Apple Intelligence in the country.
His confidence was boosted by the fact that "markets where Apple Intelligence was available" saw clear year-on-year performance "outpace markets without this AI rollout."
Still, Apple's AI push in China remains untested, with domestic competitors in the country vying to show local consumers that their technology can match America's best.
Apple will need to show Chinese consumers that iPhones are fit for the AI era.
How Washington will respond remains uncertain, but early indications are that the groundbreaking news will not dramatically shift US policy.
"Hopefully, the release of DeepSeek AI from a Chinese company should be a wake-up call for our industries that we need to be laser-focused on competing to win because we have the greatest scientists in the world," Trump said during a speech before House Republicans at their policy planning retreat.
Financial industry analysts and technology experts point to Trump's previous trade policy announcement, which laid out a plan for heightened export controls in an event like DeepSeek's rollout.
Trump's first term accelerated the rise of China hawks in the nation's capital. His administration went hard after Chinese tech companies like Huawei and laid the groundwork for a potential ban on TikTok, though he has waffled on the latter. President Joe Biden expanded those efforts.
TikTok wasn't the first showdown between the world's two largest economies over the future of technology. Here's how Deepseek will fit into the larger US-China fight.
What sets Deepseek apart from TikTok or even Huawei?
Both Trump and Xi view AI development as seminal to their nations' futures. In announcing a $500 billion AI project known as "Stargate" last week, Trump said the goal was for the US to continue to lead AI.
Gregory C. Allen, director of Wadhwani AI Center at the Center for Strategic and International Studies, said Xi has long focused on tech development. He cited some of the specific benchmarks laid out in his "Made in China 2025" plan, which was announced a decade ago. Two years later, China released its AI strategic plan, which called for Beijing to dominate the world in AI by 2030.
"The leaders in both the United States and China are convinced that leadership in artificial intelligence is foundational to the future of military and economic power," Allen told Business Insider. "And they're right."
How has the US responded to Chinese AI advances?
The first Trump administration imposed export controls on software and technology on Chinese telecom giant Huawei. Just before Trump left office in 2020, Secretary of State Mike Pompeo pressured the Dutch government to block a company from making a semiconductor deal with China. In 2022, the Biden administration imposed export controls on advanced chips such as Nivida's H100 used to train AI models. In December, Biden expanded those limitations.
It remains to be seen what Trump will do. Allen and financial analysts have pointed to Trump's trade policy, which tasked the Secretary of State and Secretary of Commerce to lead a review of US export controls "in light of developments involving strategic adversaries or geopolitical rivals."
Have US control efforts failed?
The current debate in Washington will likely focus on whether Biden-era export controls failed. If that's the case, then perhaps a debate will ensue over whether those limitations really matter.
Allen said this misses the point since export limitations are a lagging indicator. He added that the first round of Biden policies also allowed China to obtain more advanced chips than the White House may have anticipated.
"When you refuse to sell something to China in the future, it doesn't magically destroy everything that you sent to China in the past," he said.
Allen added that the Biden 2022 export controls still allowed Nivida to sell H800 chips legally, which meant China obtained crucial technology that had only degraded performance by a fraction of what the US intended. The exact chips, Allen said, DeepSeek claimed it used to train its R1 model.
"We are currently living through the poor design of the first package of AI chip export controls that the Biden administration launched in October 2022," he said. "But will soon be living through the lagging impact of the successful controls designed in October 2023."
Ed Mills, a Raymond James policy analyst, wrote in a research note that while there may be initial talk of easing control policies, the Trump administration will likely double down.
"While we expect to see a narrative emerge that DeepSeek proves the ineffectiveness of current export controls, it will most likely be interpreted by the Trump administration as a reason to tighten controls and further limit and track who has access to leading-edge technology," Mills wrote.
How has Beijing responded to US actions?
Chinese government officials repeatedly threatened to retaliate in the lead-up to the passage of the potential TikTok ban. Last March, a government official called efforts to force the social media app to sever ties "an act of bullying." It remains to be seen how Beijing will respond if a US-approved buyer is found.
In the past, Chinese media has pushed for tougher responses when the US and other Western nations moved to limit companies like Huawei.
Allen said the timing of the Deepseek announcement also fits within a larger theme of the China seeking to embarrass US leaders at critical times.
"I don't think it's a surprise that the model itself was released during the first week of the Trump administration," Allen said. "This was an attempt to have an impact on the US media discourse, the global media discourse and that's exactly what's happening."
What else has the US done about Chinese tech companies?
Under Trump and Biden, the federal government has taken multiple actions to curtail some of China's largest tech companies.
The first Trump administration moved to block Huawei from working with US companies. In 2022, the FCC banned US sales of new Huawei and ZTE-made devices, China's two largest telecommunications equipment manufacturers. Huawei does little business in the US now.
Rubio, a longtime Huawei critic, pushed Latin American countries to follow the US' lead in banning the telecom giant from shaping the future of 5G.
Trump also kick started the discussion over banning TikTok. While little information is public, lawmakers have cited national security concerns related to TikTok's parent company, ByteDance.
As a 2024 presidential hopeful, Trump backed away from his previous support for banning TikTok if ByteDance failed to sever ties to Beijing. In one of his final acts in office, Biden declined to enforce the ban after TikTok failed to convince the US Supreme Court to delay its implementation. Trump has since granted an additional 75-day reprieve, though it is outside the law.
What effect will this have on the AI race?
In the near term, DeepSeek's success has undermined the belief that bigger is always better for AI development. The Chinese-based startup developed its R1 model at roughly $5.6 million, a drop in the bucket compared to what OpenAI, Meta, and other companies are spending.
"I think policymakers need to ask a lot of questions about what is happening," Darrell West, a senior fellow in the Center for Technology Innovation at Brookings, told BI. "They need to understand how this company seemed to have made so much progress without spending a lot of money."
Marc Andreessen, the cofounder of Silicon Valley venture capital firm Andreessen Horowitz, wrote on X that is is AI's "Sputnik moment," a reference to the then-Soviet Union's early success in launching a satellite in 1957.
The Cold War advancement shocked the US, jump-starting the Space Race, which the Americans ultimately won by landing on the Moon just over a decade later.
Days after pushing for sweeping AI chip export restriction, the Biden administration has added 14 Chinese companies to its restricted trade list. Sophgo is, perhaps, the highest-profile addition. An entity of Bitmain, the firm sparked international headlines when it was identified as an intermediary between embattled Chinese hardware giant Huawei and Taiwanese chipmaker TSMC. Suspicions […]
Apple has faced growing challenges to the iPhone in China from local competitors.
Cheng Xin/Getty Images
Apple is battling to keep the iPhone relevant in China.
New figures indicate foreign-smartphone shipments to China almost halved in November.
Apple faces stiff competition from local smartphone makers like Huawei.
Apple's battle to keep the iPhone popular in China appears to be getting tougher.
Signs of fresh struggles for Apple came on Friday as the government-backed China Academy of Information and Communications Technology said foreign-smartphone shipments dropped by 47.4% year over year in November.
The drop to 3.04 million shipments of non-Chinese smartphones, including iPhones, followed a 44.3% drop in October.
The figures, first reported by Reuters, highlight Apple's continuing challenges in its most important international market. Apple's annual net sales have declined for two consecutive years in the Greater China region, where the company has built a vast supply-chain empire.
Among the biggest threats to Apple's iPhone sales in the country — which fell by almost 8%, to $66.9 billion, in its latest fiscal year — is the rise of new powerful smartphones from domestic competitors.
The Chinese tech giant Huawei has provided Apple with one of its biggest recent challenges in the form of its Mate 60 series of smartphones, introduced in 2023, and its Mate 70 series, released in November.
The Mate 60 series stunned the smartphone industry because of its inclusion of advanced chips made in China.
US export controls aimed to curtail Chinese access to advanced chips, but Huawei's inclusion of domestic-made chips with similar capabilities to US technology highlighted how quickly local companies in China were working to innovate past constraints.
Apple has been pushed to respond to the rising competition in China by introducing discounts to entice consumers. The company has announced discounts worth about $70 on its iPhone 16 Pro models, for instance, ahead of the Lunar New Year.
It also faces pressure to accelerate the rollout of its suite of generative-AI features to iPhones in China, where Apple Intelligence isn't yet available.
Apple did not immediately reply to a request for comment from Business Insider.
Huawei is set to launch a new series of smartphones that rely on domestic expertise.
Tingshu Wang/Reuters
Huawei is set to launch its new line of Mate 70 phones on Tuesday.
Its software and hardware have been developed with domestic expertise.
It marks a new era of self-sufficiency at a moment of tech division between the US and China.
Look no further than Huawei to get a sense of just how far apart the US and China are heading into a second Donald Trump presidency.
On Tuesday, the Shenzhen-based tech giant is set to unveil a slate of new smartphones — the Mate 70 series — that will be the most free they have ever been of Western software and hardware.
During his first term in the White House, the president-elect moved to block what he saw as a national security threat by wielding export controls and an executive order to cut the Chinese firm's ties to crucial US partners and suppliers.
President Joe Biden's outgoing administration continued this approach, which meant Huawei had to look closer to home for chips, operating systems, and apps.
This term, Trump will stare down a Huawei that's showing it's doing just fine without its US suppliers.
On the software side, all lingering remains of Huawei's former dependence on Android look set to be excised on the Mate 70 devices as they launch with HarmonyOS Next, an operating system built to run apps specific to Huawei's system.
Huawei first launched HarmonyOS in 2019 after being cut off from Google's powerful Android system. Early versions of the platform contained code from the Android Open Source Project, but HarmonyOS Next removes it all, making it a product solely of Huawei's own making.
Meanwhile, on the hardware side, Huawei is looking to raise the bar on performance by introducing a new made-in-China smartphone chip in some of the new Mate 70 models, according to the Wall Street Journal.
A performance leap with a domestic chip would be a big deal. The top-end version of the Mate 70 predecessor — the Mate 60 — stunned policymakers last year as its launch showed off capabilities that were once only possible to accomplish with equipment sourced in the US.
The Mate 60's pro model was reported to have an advanced chipset called Kirin 9000s, designed by Shenzhen-based HiSilicon and manufactured by state-backed semiconductor firm SMIC. It gave the phone 5G-like cellular capabilities, per a teardown by Bloomberg.
The Huawei Mate 60.
Wang Gang/Getty Images
Together, the software and hardware advances are a symbolic moment that shows how little effect efforts in Washington have had on squeezing a company dubbed a "national champion" by Beijing's mandarins since the 1990s.
Bad news for Apple
This growing self-sufficiency isn't going unnoticed.
Apple, which considers China its most important international market beyond the US, has seen iPhone sales suffer in the region as local consumers have gravitated toward handsets that are aggressively priced and give them a sense of national pride.
According to figures from research firm Counterpoint, Huawei held an 18% share of the Chinese smartphone market in the third quarter of this year, while Apple had a 14% share. Depending on the success of the Mate 70 phones, that gap could widen in the months ahead.
Apple CEO Tim Cook, for his part, wants to ensure that Chinese consumers remain dedicated to the iPhone maker, which has sold its smartphones there since 2009. This week, he is visiting the country for at least a third time this year to attend an industry conference.
During his trip, he will be acutely aware that iPhones face stiff competition in China. Back in 2009, no Chinese company had an answer to Steve Jobs' creation, and even if they did, they'd need to package it up with US technology. Huawei's Tuesday launch could well change that.
