Huawei reportedly takes 1st place in China’s cellphone market

The corporate was the top-selling smartphone model in China within the first two weeks of 2024, in response to the South China Morning Post citing a report from analysis agency Counterpoint Analysis. The agency famous that it’s the primary time Huawei has taken first place because the U.S. put the corporate on a commerce blacklist in 2019. (The U.S. accused Huawei of getting ties to China’s navy, expenses the corporate denies.)

Final August, Huawei returned to the premium smartphone market with the Mate 60 collection, that includes a complicated China-manufactured processor. The Kirin processor, made by Chinese language chipmaker Semiconductor Manufacturing Worldwide Company (SMIC), is only a few generations behind essentially the most superior chips utilized in Apple’s newest iPhone. 

State media celebrated the discharge of the cellphone as proof of China’s means to face up to U.S. export controls on gross sales of superior chips and chipmaking tools to Chinese language corporations.

Huawei’s achieve is Apple’s loss. Final quarter, the U.S. tech firm reported a 13% drop in gross sales in Better China—which incorporates mainland China, Hong Kong and Taiwan. CEO Tim Cook dinner referred to as China the “most competitive smartphone market in the world” in an interview with Reuters final week. 

SMIC, which makes Huawei’s smartphone processors, reported $174.7 million in quarterly internet earnings on Tuesday, forward of analyst expectations of $139.1 million. 

Huawei’s AI chips

But Huawei’s means to maintain its smartphone strengths could possibly be constrained by one other one in every of its successes: the corporate’s AI chips. 

Robust demand for the corporate’s Ascend AI chips is forcing the corporate to sluggish manufacturing of its smartphones, Reuters reported Monday, citing unnamed sources. Huawei reportedly makes use of one facility to supply each its smartphone processors and AI chips, however is scuffling with low manufacturing yields. 

Huawei didn’t instantly reply to a request for remark. 

Analysts beforehand prompt to Fortune that whereas Huawei’s means to make a complicated processor given its constraints was spectacular, Chinese language chip makers will possible battle to supply extra superior semiconductors in an economical method. 

Nonetheless, Chinese language corporations have embraced Huawei’s chips, which reportedly have capabilities that method the processors made by market chief Nvidia. The U.S. has stopped Nvidia from promoting its most superior chips to Chinese language tech corporations, that are embarking on their own arms race to develop generative AI merchandise. 

Nvidia continues to develop China-focused chips that adjust to U.S. export controls. But Chinese language corporations now assume that these weaker chips are not considerably higher than cheaper home choices like these made by Huawei, the Wall Street Journal reported earlier this yr. 

In late December, Huawei mentioned it anticipated to generate nearly $100 billion in gross sales in 2023, which might be a rise from the $92.3 billion it generated in 2022.