Huawei Gains Ground in China, Hurting Apple

Huawei’s remarkable turnaround began exactly one year ago tomorrow. It was then that, for the first time since 2020, the company launched a new flagship line equipped with its own chipset.

The Mate 60 series showcased the Kirin 9000s, which included 5G support. Before the Mate 60 series, Huawei had utilized Snapdragon SoCs that were modified to disable 5G connectivity in the P50 series, the Mate 50 series, and the P60 line. Qualcomm had obtained approval from the U.S. Commerce Department to send those chips to Huawei.

The Kirin 9000s was produced by SMIC, China’s largest semiconductor foundry, utilizing its 7nm process node.

Due to restrictions on shipping advanced lithography equipment to China, 7nm is the most advanced process node that SMIC can achieve with Deep Ultraviolet (DUV) lithography. While there are ongoing reports of remarkable innovations that could enable SMIC to develop 5nm and even 3nm chipsets, none of these claims have materialized thus far.

However, Huawei was able to capitalize on the momentum generated by the Mate 60 series and use it to generate demand for its flagship Pura 70 series. In the process, it knocked the iPhone out of the top five smartphones shipped in China, the world’s largest smartphone market.

In the quarter ended June, Huawei reported revenue of 239 billion yuan ($33.6 billion) in the quarter ended June. That translates to a 33.7% year-on-year increase.

This was Huawei’s sixth consecutive quarter of top-line growth. The company was on the verge of achieving its goal of becoming the world’s largest smartphone manufacturer when the US began imposing sanctions on the company in 2020, forcing it to develop its own HarmonyOS operating system.

The US also forced Huawei to stop designing its own high-end Kirin 5G processors.

Huawei’s net profit for the second quarter was forecast at 35.5 billion yuan ($4.72 billion), down 18.6% year-on-year, but the company reported one-off gains from divestments last year.

During the second quarter, Huawei said its smartphone shipments rose 50% as it and fellow Chinese companies Vivo and Oppo knocked the iPhone out of the top five most-shipped smartphones in the country. Apple dropped to sixth place. The top 5 in the second quarter in order were:

1. Vivo holds a market share of 19%
2. while Oppo has 16%
3. Honor and Huawei both have a 15%
4. and Xiaomi accounts for 14%

Later this year, Huawei will launch the Mate 70 flagship series, which is renowned for its advanced features. It will be intriguing to see what innovations Huawei introduces and the specifications of the application processor that will power this lineup.