Huawei faces a tough battle amid global 5G rollout

The Mate XS, which was launched in China recently, will hit the street in Hong Kong next Thursday, and Huawei has begun accepting pre-orders from today.

Hong Kong will soon become a 5G city as operators prepare to launch their next-generation networks and enhanced services from next month.

By SC Yeung

Among the smartphone players aiming to cash in on the expected upgrade moves by consumers is China’s Huawei Technologies.

Huawei will launch its new foldable screen 5G smartphone, the Mate XS, in Hong Kong on March 19, one day before rival Samsung’s Galaxy S20 series hits the street in the city. The Chinese tech giant hopes the handset, which boasts a better screen among other features, will gain enough traction to make a difference to the firm’s overall smartphone business.

Success, however, won’t be easy, unlike the case in the mainland China market, as the device may prove a tough sell in Hong Kong due to the absence of Google mobile services.

The Mate XS, which was launched in China recently, will hit the street in Hong Kong next Thursday, and Huawei has begun accepting pre-orders from today. The phone is an upgraded version of Mate X, Huawei’s first foldable screen smartphone. While the new device still has an external foldable screen, it deploys a “quad-layer” construction for the screen to make it stronger.

The phone also comes with an improved design of the hinge. Mate XS also upgrades its processor to Kirin 990 with an integrated 5G modem inside.

The Mate XS will be the first Huawei 5G smartphone to hit the street in Hong Kong, ahead of the firm’s P40 series flagship phone. But the device is clearly not for the mass market, as it will be priced at HK$19,888.

That could make it the most expensive smartphone in the city, given that the Samsung Galaxy Fold is priced below HK$15,000. As Mate XS comes without the popular Google mobile services, the high price may prove a handicap and deter the early 5G adopters.

Huawei has been bolstering its position in the past few years and trying to emerge as the world’s biggest smartphone brand, with its dual-brand strategy in China and aggressive marketing campaigns in Europe helping the firm lure customers from Samsung and Apple. Last year, Huawei sold around 240 million smartphones, surpassing Apple to become the second-largest player in the industry.

However, the company has lost momentum recently as its new products are not allowed to deploy Google mobile services due to a US embargo. The Mate 30 series smartphone was the first flagship product to suffer from Washington’s trade ban. As the development means an Android smartphone without Google services, customers in overseas markets could return to Samsung and Apple as they may not want to forego their favorite apps and services.

Huawei, as a matter of fact, has admitted that it could face a decline in smartphone shipments this year due to the Google factor. According to a report carried by the tech-focused digital media platform The Information, Huawei expects to see a 20 percent drop in sales of its Android smartphones during 2020.

In 2019, Huawei sold 240 million devices. So, the projected decline to the 190-200-million-unit level represents the cost the Chinese company is bearing in the face of the US trade ban.

Last year, Huawei had bet on its first-half flagship P30 series as the phone was still offering Google mobile services. But starting from the second half of 2019, Huawei new smartphones did not come with Google software, clouding the sales prospects.

As Huawei products lacked Google services, consumers could simply switch to other Android smartphone products that allowed the users to continue relying on their familiar online tools.

Amid the problem, Huawei is doing all it can to promote its own AppGallery and tout it as a good replacement for the Google Play store. As part of these efforts, Huawei has recently begun offering AppGallery contributors up to 100 percent of the revenue generated by the apps for the first two years.

The aim is to strengthen the firm’s own Huawei Mobile Service (HMS) and eliminate the impact of US sanctions which block Huawei from using Google services and applications.

According to Huawei, the incentive is split into two periods. During the first 12 months, developers can avail 100 percent of the revenue generated by non-gaming apps, and 85 percent for games. In the second year, they’ll earn 85 percent for both apps and games, while 95 percent is offered if the application is education-related.

After the promotional period, developers would get 70 percent while Huawei would keep 30 percent of the revenue generated.

The incentive has been rolled out only for overseas app developers, a clear signal that Huawei understands how tough the market will be for smartphones that lack Google services.

The Chinese firm wants to scale up its AppGalley to a level where consumers wouldn’t have to fret about the absence of Google apps. 

The task, however, would take time, even if were to assume the company succeeds in its mission. Hence, there is still the sales challenge in overseas markets, regardless of the new advanced products.  More

By SC Yeung http://www.ejinsight.com/  english@hkej.com