Tech war: Huawei to revive smartphone business on the back of fresh AI-powered operating system even as US sanctions continue to bite
- HarmonyOS 4, the latest iteration of Huawei’s self-developed operating system, has been integrated with the firm’s own AI model Pangu
- Huawei’s Android alternative has enhanced support for other devices in Huawei’s ecosystem, including its smart electric vehicles
The latest iteration of HarmonyOS is “crucial” to Huawei’s smartphone strategy, which aims to improve the experience on the software side to make up for certain disadvantages in the hardware, Ivan Lam, senior analyst at Counterpoint Research, said on Monday.
“It has always been the goal for HarmonyOS … to make a big contribution by creating a smoother experience on Huawei devices that have less advanced chips,” Lam said.
Huawei over the past year has managed to maintain a relatively stable share of 9 to 12 per cent in China, the world’s biggest smartphone market, according to Counterpoint’s Lam.
The company’s share of smartphone sales on the mainland grew 58 per cent year on year in the second quarter, seizing an 11.3 per cent share of the domestic market, on the back of a resumed pace of product launches, according to Counterpoint data.
“If Huawei can hold on to that stable market share, its growth momentum can continue, despite an overall decline in China,” Lam said.
China’s smartphone market narrows quarterly decline, with Huawei back in top 5
Huawei shipped a total of 14.3 million smartphones in China in the first half of 2023, up nearly 40 per cent compared to the same period last year, bolstered by resilience in the industry’s high-end segment, according to Will Wong, senior research manager at IDC Asia- Pacific.
“One of the key reasons for the improved pace of product launches is that Huawei managed to optimise its supply chain after years of negative impact from US sanctions,” Wong said.
Huawei resumed the launch of its flagship P-series smartphone in April after a hiatus of more than a year. Its latest Mate-series handset was released last September after skipping an update in 2021. These two models, however, only support 4G connectivity.
US-sanctioned Huawei sharpens focus in home market with local government deals
The company is expected to resume its release of 5G smartphones by the end of this year, as it gets a fresh supply of chips from local suppliers, according to a Reuters report last month that cited a number of research firms as sources.
Although Huawei has solved certain supply chain issues and adopted domestic replacements, Counterpoint’s Lam said lingering uncertainty revolves around procuring the latest camera and 5G chips.
“In the best-case scenario where 5G chips are procured and used in the flagship model, it will give Huawei a small boost, but it won’t be enough to drive its sales back to the top-three position in the market,” Lam said. “Even if it solves the 5G chip issue, the scale of production might still be constrained.”