Huawei Technologies Co launched its latest clamshell-style foldable smartphone series Pocket 2, after the company regained the No 1 spot in China’s smartphone market in the first two weeks of 2024 amid the U.S. government’s prolonged restrictions. The move also came as Huawei consolidated its position in the Chinese foldable smartphone segment as the top vendor amid intensified competition from players such as Oppo and South Korea’s Samsung. Yu Chengdong, CEO of Huawei’s Device Group, said the Shenzhen, Guangdong province-based company now accounts for 51.2% of the Chinese foldable smartphone market. The foldable form factor has been heralded as the new frontier in mobile technology.
Currently, clamshell-style foldable smartphones sell better than tablet-like ones among female consumers. Yu said the new model is priced from CNY7,499. Pocket 2 features cutting-edge camera lenses and artificial intelligence technologies which can help consumers capture better photos and videos. Global foldable smartphone shipments are expected to pass the 100-million mark by 2027 from 13.1 million units in 2022, with a compound annual growth rate of 51% during the period, said market research company Counterpoint Research. China's shipments of foldable smartphones reached 7.01 million units last year, up 114% from 3.2 million in 2022, according to a report by tech market research firm IDC.
Tom Kang, Research Director at Counterpoint, said: “At the moment, foldable smartphones remain a niche. But it is an important segment for brands looking to maintain leadership in innovation and a premium market presence.” Kang said China emerged as the biggest foldable smartphone market globally in 2022. “If you want to make it in foldable smartphones, you have to make it there.” A survey conducted by Counterpoint spotlights a strong interest in foldable smartphones among Chinese consumers. As many as 64% of smartphone users in the USD400 and above price bracket in China are considering foldable smartphones for their next purchase, with 20% already committed to the idea and an additional 44% weighing it as an option.
Huawei Technologies plans to give its staff CNY77.1 billion in dividends under its employee stock ownership plan (ESOP), after the Chinese tech company made a strong comeback in the 5G smartphone market. The dividend will be CNY1.50 a share, and the payment will be made in March or April, three Huawei employees told China Daily. Huawei, which is wholly owned by its employees, has about 51.3 billion shares outstanding. Huawei Founder Ren Zhengfei has shares in the firm as a natural person and he also participates in the ESOP, which has been in place since Huawei was set up in 1987 and is implemented through the Union of Huawei Investment and Holding. Some 142,315 workers were part of the plan as of the end of 2022, according to the firm’s earnings report for that year.
Counterpoint said the three reasons behind Huawei’s success were its latest Mate 60 sales with Chinese-developed chips, brand loyalty among consumers, and the rapid evolution and consumer acceptance of its in-house Harmony OS 4.0 operating system. Xiang Ligang, Director General of the Information Consumption Alliance, said Huawei’s comeback will cut into Apple’s market share in China and also weigh down its domestic peers, especially Honor Device Co, a spinoff from Huawei, which was formed three years ago. Last month, Hu Houkun, Huawei’s rotating Chairman, said: “After years of hard work, we’ve managed to weather the storm. And now we’re pretty much back on track.” Huawei expected its revenue to hit CNY700 billion in 2023, a 9% year-on-year increase.
As AI impacts all corners of the devices market, smartphones are expected to be the device driving the AI revolution into every home, said a report by global market consultancy IDC. IDC’s preliminary forecast suggests 170 million next-generation AI smartphones will be shipped in 2024, representing almost 15% of total smartphone shipments and a sizable jump from the roughly 51 million shipped in 2023. This share is expected to climb rapidly beyond 2024 as industry players push aggressively towards new chips and use cases that evolve further, IDC said, as reported by the China Daily.
Chinese smartphone vendors are accelerating efforts to integrate generative artificial intelligence (AI) technology into their handsets to boost sales. Meizu, which was acquired in 2022 by carmaker Zhejiang Geely Holding Group, announced that it will “terminate new projects on traditional smartphones” to pursue an “all in AI” strategy over the next three years. Headquartered in Zhuhai, Guangdong province, Meizu said it will develop devices and a customized mobile operating system that would be open to all large language models (LLMs), including those from Microsoft-backed OpenAI, creator of ChatGPT. Oppo also announced the start of its “AI phone era”, as it pushes forward the development of its own LLM called AndesGPT. “The new wave of AI technology, powered by LLMs, is restructuring the future of the mobile phone industry,” Chief Executive Tony Chen said. “The impact of AI on the handset industry in the next five years is comparable to when smartphones replaced feature phones,” he added, as reported by the South China Morning Post.
