Huawei vs Apple: Tech Rivalry Insights

1. Summary

• The competitive dynamics between Huawei and Apple in the tech industry are intensifying as both companies deploy strategic innovations to maintain market dominance. Huawei has managed to bolster its market position significantly, thanks to innovative promotional strategies like 'Buy Now, Pay Later' and complimentary offerings, as well as technological advancements in products such as the Huawei Pura 70 Series. Despite facing sanctions from the US, which limit access to critical technologies, Huawei has seen a 41% year-on-year increase in smartphone shipments due to these efforts. Meanwhile, Apple faces challenges, particularly in China, where its market share has fallen as competition from local manufacturers intensifies. Apple's response has involved integrating advanced AI features into its products, like the upcoming iPhone 16 Series, and forming strategic collaborations, such as with OpenAI, to enhance its voice-command technologies. The report further explores the broader industry trends, particularly the rise of Chinese manufacturers on the global stage, reshaping market dynamics.

2. Huawei's Promotional Strategies and Market Expansion

• 2-1. Buy Now, Pay Later Plans and Complimentary Offers

• Huawei has implemented a 'Buy Now, Pay Later' strategy with 0% interest for up to 24 months, applicable at Huawei Concept Stores using BDO Credit Cards. This promotional offer includes complimentary gifts with every in-store purchase of the Huawei Pura 70 Series, such as sports kettles, backpacks, and a 1-year VIU VIP subscription. The promotion is active until December 31, 2024, and is supported by DTI Fair Trade Permit No. FTEB-193754, Series of 2024.

• 2-2. Satellite Communication Service for Hikers

• Huawei offers the 'Tiantong Satellite Communication Service' specifically designed for hikers in remote areas with limited network coverage. This service supports voice and messaging functions via satellite connectivity. Customers of the Huawei Pura 70 Ultra can register for this service and receive 12 months of complimentary monthly fees, along with a HK$300 mobile and accessories voucher, valid until August 31, 2024. This initiative ensures safe communication in emergency situations.

• 2-3. Market Performance and Competitive Edge in China

• Huawei has experienced a significant 41% year-on-year increase in smartphone shipments in Q2 2024, primarily attributed to the launch of its new Pura 70 series. This growth has occurred despite US sanctions that have disrupted Huawei's access to the global chipset supply chain. Concurrently, Apple's market share in China has declined from 16% to 14%, causing a drop in their rank from third to sixth place. Analysts note that domestic manufacturers, including Huawei, have successfully occupied the top five positions in the mainland Chinese market.

3. Technological Innovations by Huawei

• 3-1. Introduction of MateBook GT 14 with eGPU

• On August 4, 2024, Huawei unveiled the MateBook GT 14. This laptop, designed to combine productivity and gaming capabilities, features an Intel Core Ultra 9 185H processor that can deliver thermal performance up to 115 W. It has a 3:2 OLED display with a refresh rate of 144 Hz and a peak brightness of 1,000 nits. The laptop weighs 1.49 kg and has a thickness ranging from 15.3 mm to 18.4 mm. Available specifications include options for Intel Meteor Lake-H processors, up to 32GB of RAM, and storage choices of 1TB or 2TB. The MateBook GT 14 is currently sold exclusively in China with prices starting from approximately $1,040 to $1,526.

• 3-2. Launch of MatePad Pro 12.2

• Huawei has introduced the MatePad Pro 12.2, a flagship tablet that aims to compete with Apple’s iPad Pro. This device is equipped with a dual-layer OLED panel featuring a peak brightness of 2,000 nits and a refresh rate of 144 Hz. The tablet weighs 508 grams and is only 5.5 mm thick. It includes a substantial 10,000mAh battery capable of supporting up to 15 hours of usage and features 100W fast charging. Pricing for the 12GB + 256GB model starts at around $599, and it is only available in China.

• 3-3. Huawei Nova Flip Pre-launch Specifications

• Prior to its official release, the Huawei Nova Flip was benchmarked on Geekbench. It scored 1,000 points in the single-core test and 2,419 points in the multi-core test, powered by the Kirin 8000 chip. The device is equipped with 12GB of RAM and runs on Android 12. Key features include a 50MP rear camera, a 4,400mAh battery with 66W fast charging support, and HarmonyOS 4.2. Additionally, it includes a square cover screen that has a 'Call-Emoji' feature.

• 3-4. Upcoming Tri-folding Smartphone

• Huawei is also in the process of developing the world's first tri-folding smartphone equipped with dual hinges. The prototype has been completed, with mass production anticipated to start in late 2024. This innovative device will incorporate advanced artificial intelligence technologies as part of Huawei's strategy to lead the foldable phone market, in which it currently holds a 35 percent market share.

• 3-5. New Power Adapter with 140W Fast Charging

• Huawei recently launched a power adapter supporting 140W fast charging, priced at approximately $40.43 in China. This adapter features a single USB-C port and includes a 1.8-meter cable. It adheres to multiple standards, including PPS, PD 3.0, QC 2.0, and SCP 2.0, making it suitable for a variety of devices. The adapter utilizes GaN technology for a compact design and includes a 12-layer security protection system.

4. Huawei’s Strategy Amid US Sanctions

• 4-1. Impact of US Sanctions on Huawei Pura 70

• Huawei has been significantly affected by the ongoing sanctions imposed by the US government, which have restricted its access to US technology and services. This situation has hindered Huawei smartphones, including the Huawei Pura 70, from utilizing official Android releases and accessing Google's services such as the Play Store. Despite these challenges, there is a workaround for global variants of the Huawei Pura 70. These variants operate on EMUI, which is based on AOSP, enabling users to install the Google Play Store via the Huawei AppGallery and the microG app.

• 4-2. R&D Facility in Guangzhou

• Huawei is in the process of completing a new research and development (R&D) facility in Guangzhou, anticipated to be finished by September. This new facility will accommodate 5,000 employees and serves as part of Huawei's strategic response to the US trade penalties that prevent the company from acquiring cutting-edge chipmaking equipment and wafers from international suppliers. The facility spans a construction area of 305,000 square meters and includes eight research and development buildings, a hotel, a cooling tower, a guard room, and two basements. The initial focus areas will be cloud computing, the Internet of Things, and smart cars, although there are currently no immediate plans for chip production.

5. Apple’s Current State and Technological Developments

• 5-1. Decline in Market Share in China

• Apple Inc.'s market share in China has experienced a significant decline, dropping from third place to sixth in Q2 2024. According to Canalys data reported by Reuters, Apple's market share decreased to 14%, a decline of two percentage points from the same period last year. This drop coincided with a 41% year-on-year increase in Huawei's smartphone shipments, largely driven by the launch of its new Pura 70 series in April 2024. The intense local competition from Chinese brands such as vivo, OPPO, Honor, Huawei, and Xiaomi has significantly impacted Apple's market position. Despite Apple's efforts to boost demand through substantial price cuts, including discounts of up to $318 on select iPhone models, its shipments still fell by 3.1% year-on-year. Criticism of Apple's strict App Store policies and acknowledgment of the company's challenges in the region by CEO Tim Cook have further compounded the difficulties faced by Apple. Analysts expect Huawei's strong performance to continue, with projections indicating that Huawei's overall smartphone shipments in China may exceed 50 million units in 2024.

• 5-2. Recent Technological Improvements and Challenges

• Amid its market share challenges in China, Apple has been focusing on technological updates and improvements. In response to declining iPhone sales and market pressures, Apple has engaged in aggressive discounting campaigns alongside the introduction of technological enhancements across its devices. For instance, despite a fiscal Q3 earnings beat with earnings of $1.4 per share, Apple reported a 0.9% decline in phone sales amounting to $39.30 billion. Apple has been actively incorporating artificial intelligence (AI) functionalities into its devices, seeking a local partner in China to enhance AI features specific to the region. However, Apple's technical and market strategy developments have faced challenges, exemplified by the delayed launch of Apple Intelligence, which is aimed at improving text, image, and video manipulation capabilities. The introduction of new features in iOS 18 and iPadOS 18 is intended to bolster Apple's market presence amid fierce competition from Chinese brands, particularly in the premium market segment.

6. AI Advancements and Strategic Collaborations

• 6-1. Generative AI Technologies and Ethical Considerations

• The document discusses the advancements in generative AI technologies among major tech companies, particularly focusing on Apple's collaboration with OpenAI. This partnership aims to enhance Apple's voice-command assistant in iOS devices with new AI features, marking a significant step in Apple's AI initiatives. Ethical considerations also arise from this collaboration, as Apple and other tech giants, following a pledge by US President Biden, commit to adopting voluntary AI safeguards, even though these guidelines are non-enforceable. The broader implications of such collaborations are discussed, highlighting the potential for responsible AI innovation within the tech industry. Furthermore, the document emphasizes the need for ethical frameworks to accompany the rapid development of generative AI, reflecting the balance between innovation and responsibility in the evolving landscape of technology.

7. Market Dynamics and Competitive Analysis

• 7-1. Impact of Chinese Manufacturers on Global Market

• Chinese manufacturers have significantly influenced the global smartphone market landscape, evidenced by the competitive advancements of companies like Huawei, Vivo, and Oppo. The rapid growth of Huawei, marked by a 41% increase in smartphone sales in Q2 2024, highlights how these companies have capitalized on local consumer preferences and innovative product offerings. The consolidation of Chinese brands at the top of the Chinese smartphone market, with Huawei, Vivo, Oppo, and Honor occupying the leading positions, indicates a formidable challenge for global competitors like Apple. This increasing dominance disrupts traditional market hierarchies, prompting foreign multinational companies to adopt aggressive strategies in pricing and product development. The pressure from Chinese brands not only affects direct competition within domestic markets but also alters international dynamics, as these companies expand their reach beyond China and gain market share in other regions. As a result, the competitive landscape is reshaped, with Chinese manufacturers increasingly dictating consumer trends and preferences on a global scale, contributing to a transformation in global market dynamics.

Conclusion

• The key findings from the report underscore Huawei's strategic resilience and Apple’s struggles within the Chinese market. Huawei’s ability to innovate with products like the Huawei Pura 70 Series, despite US trade sanctions, highlights its adaptive strategies and robust promotional capabilities that significantly contributed to a market share increase. This underscores Huawei’s capacity to compensate for geopolitical disadvantages with creativity and localized market strategies. On the other hand, Apple, while integrating AI into new projects like the iPhone 16 Series, confronts declining market shares amidst strong local alternatives. Its ongoing partnership with OpenAI reflects strategic attempts to regain competitive leverage through technological enhancements, yet the market presence in China remains a challenge due to sustained local competition. However, these rivalries are also emblematic of broader industry trends where Chinese companies are not just local leaders but significant global influencers, suggesting Apple's need for more comprehensive localized strategies. The report suggests future prospects may include more intricate global cooperative models or diversified market tactics as companies navigate these complex competitive and ethical terrains, emphasizing practical applicability in market expansion and technology deployment.

Glossary

• Huawei Pura 70 Series [Product]: The Huawei Pura 70 Series is a key product line that has significantly impacted Huawei's market position, contributing to a 41% increase in smartphone shipments year-over-year. Its introduction showcases Huawei's ability to innovate and adapt even amid US sanctions, making it a focal point of the company's growth strategy in the competitive smartphone market.

• Apple iPhone 16 Series [Product]: The upcoming iPhone 16 Series represents Apple's latest advancements in smartphone technology, featuring significant design changes and AI-powered enhancements. This product line plays a crucial role in Apple's strategy to regain market share in an increasingly competitive landscape, especially against major competitors like Huawei.

Source Documents

• Huawei and Apple's Competitive Dynamics and Innovations in the Tech Industrygo-public-report-en-cf198a17-2e52-41f3-b6d6-72c995e0a7c8-0-0
• Technological Advancements and Market Dynamics in the Global Tech Industrygo-public-report-en-cfd11b2c-b069-45b2-92c5-0869ba0b0e55-0-0
• AI Integration and Strategic Developments Among Technology Giantsgo-public-report-en-e882acda-23b9-43c3-bd7b-ce3902aee721-0-0