New Huawei device is China’s answer to foldable iPhone
The Mate XT 2 has two folding mechanisms
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[BEIJING] Huawei Technologies and Xiaomi are raising the stakes in China’s smartphone arena just days before Apple’s first foray into the foldable category.
Huawei on Monday unveiled the latest edition of its ultra-premium trifold device, the Mate XT 2, which has two folding mechanisms. A successor to the Mate XT released two years ago, the new device increases the complexity of engineering as well as the price: to 19,999 yuan (US$2,980) or about 10 per cent more.
The company’s consumer business chief Richard Yu said the rise in cost is due in part to the growing difficulty of procuring memory. In another sign of the memory supply crunch hitting specifications, the Mate XT 2 – which functions as a regular smartphone that can unfold into a 10.2-inch tablet – comes with 16GB of memory and 256GB of storage in its most basic edition, relatively paltry amounts for a premium product.
The new foldable is significant for ushering in Huawei’s LogicFolding chip design philosophy, with its Kirin 9050 Pro processor the first silicon to be developed under that programme. Huawei’s semiconductor chief He Tingbo unveiled earlier this year the alternative path to developing cutting-edge semiconductors, aimed at working around US-led restrictions barring the company’s access to advanced lithography tools.
Ahead of the launch of the trifold phone, He published a paper dismissing concern that its technology would lead to overheating and said the new chip has significantly reduced power consumption. “The chip was cooler than its predecessor while comprising 55 per cent more transistors per square millimeter and delivering as much as 66 per cent power reduction on some key tasks,” He wrote in the paper.
The Mate XT 2 will be available to buy in China from Saturday.
Later in the evening, Xiaomi chief executive officer Lei Jun unveiled the Xiaomi 18 Fold, another foldable developed in China as local manufacturers seek greater self-sufficiency.
Starting at 10,999 yuan for the 256 GB version, the handset will run on memory from homegrown champion CXMT and Xiaomi’s Xring O3 processor. It features a passport-like design that is similar to what the first foldable iPhone from Apple is expected to look like.
“Right now, memory is very expensive. So our pricing isn’t cheap but it’s definitely good value for your money,” Lei said at a glitzy event in Beijing that convened more than 3,000 attendees.
The defensive action from two of China’s top brands underscores the threat and opportunity that Apple’s entry into the niche but premium foldable segment represents. Expected to be priced at more than US$2,000, the foldable iPhone will bring new attention to these devices, which Chinese makers and global shipments leader Samsung Electronics have been selling for years. In China, foldables have been a resilient bright spot in an otherwise declining market.
“Apple has the world’s biggest premium device installed base. Its foldable will sell well and rapidly grab market share,” Counterpoint analyst Ivan Lam said. He expects the new handset to spur wider adoption among consumers, with spillover effects that lift demand for rivals’ devices as well.
Xiaomi’s profit has declined for three consecutive quarters as the company worked to reduce shipments of unprofitable low-end devices. Huawei, though still posting shipment growth, also saw its profit decline in the first half in part because the company was forced to hoard more components to fend off rising memory costs. Huawei joined Xiaomi and Honor Device in a fresh round of price hikes earlier this month, local media Jiemian reported.
Smartphones are headed for their worst contraction on record this year, with shipments likely to decline 14 per cent, Counterpoint data shows. Chinese smartphone makers are among those worst hit due to their outsize exposure to budget devices that are least able to digest the cost of surging component prices. To escape that crunch and raise selling prices, most brands are now heavily promoting their premium tiers, such as foldables.
Getting out a couple of days before Apple’s splashy new product event on Wednesday gives brands the chance to own the spotlight at least momentarily. Apple could grab a quarter of the global foldable market this year and claim the No1 spot with a 41 per cent market share next year, according to projections by Smart Analytics Global. BLOOMBERG
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