Technology Huawei's Mate 40 Pro could be firm's last hurrah in the smartphone world

20:50  22 october  2020
20:50  22 october  2020 Source:   cnet.com

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Huawei on Thursday welcomed into the world the latest addition to its flagship lineup: the Mate 40 Pro. But the phone's arrival was bittersweet. The device launched under a dark cloud, with a combination of US sanctions and reputational damage to the company raising the question of whether the Mate 40 Pro will be the last Huawei phone of its kind.

a close up of electronics: Huawei's Mate 40 Pro Andrew Hoyle/CNET © Provided by CNET Huawei's Mate 40 Pro Andrew Hoyle/CNET

Since 2018, the US government has been imposing increasingly harsh sanctions on Huawei due to the company's purported links to the Chinese Communist Party. That's the reason Huawei's phones , which are popular elsewhere in the world, including Europe, aren't on sale in the US.

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It's also why the Mate 40 series is the third lot of Huawei flagships (after the Mate 30 and P40 series) to arrive without access to Google services. Over the past year, Huawei has made great strides to beef up its app offering and homegrown Harmony operating system, but it still doesn't match up to Google and Apple . That's made it hard to recommend Huawei devices over Android rivals.

graphical user interface, application: Huawei's Mate 40 Pro. © Andrew Hoyle/CNET

Huawei's Mate 40 Pro.

The lack of access to Android's key services is taking its toll. Despite the company clinging to its No. 1 position in the global smartphone market in the first half of 2022 -- largely because of its strong performance in China -- Huawei's global market share dropped to 16% in August, from 21% in April, according to the latest Monthly Market Report by Counterpoint Research.

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In comparison, its closest competitor, Samsung , has jumped from 20% to 22%. Not only has this seen Huawei drop to second in global rankings, it's also created a 6% gap between first and second place.

"Many of the restrictions imposed on Huawei by the US government are beginning to bite now, so it is losing share in many markets outside China," Counterpoint VP of Research Peter Richardson said over email. "Assuming there is no relaxation in the restrictions placed on Huawei by the US administration, it is likely that its market share will continue to suffer."

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It's a bad time to be vulnerable if you're a phone manufacturer, because the global 5G rollout is really beginning to gain momentum. Every jump to the next generation of network technology creates wiggle room at the top for a reshuffle. Ambitious companies can use this to their advantage, but just as there are always winners, there are always losers.

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The big loser in the leap from 3G to 4G was HTC -- once one of the most popular phone makers in the world, now nowhere to be seen in global rankings. Huawei will be keen to avoid a similar fate.

It's not as though Huawei isn't well prepared for 5G. As one of the world leaders in building 5G equipment, it has an inside knowledge of what's required of 5G devices. Its homegrown Kirin 9000 chip, which powers the Mate 40, is a prime example of this: It's the first and only 5 nanometer, 5G system-on-a-chip with the modem built-in.

Huawei's 5G credentials should put it ahead of the game. But unfortunately, the Kirin 9000 is the last such chipset the company will be able to produce for its phones. US trade restrictions introduced this year mean Huawei no longer has access to many of the components it needs, and the company stopped manufacturing Kirin chips last month.

It's a big loss for the company. Kirin has been the secret sauce allowing Huawei to get ahead of the competition -- particularly setting it apart from rival upstarts from within China. Boosting everything from speed to camera performance, the chip is responsible for many of the things CNET has praised Huawei phones for over the years in our reviews. Two years ago, Huawei touted that an older version of its Kirin chip was smart enough to power a self-driving Porsche.

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During a phone briefing this week, Huawei declined to answer any questions about what the loss of Kirin would mean for phones beyond the Mate 40. But without clarity on what post-Kirin Huawei phones might look like, it's hard not to see the Mate 40 as the last of its kind.

"It is a tragedy to see Huawei's difficulties in its smartphone division," said Ben Wood, chief of research at CCS Insight. "Having once been close to challenging Samsung as the market leader for mobile phones, the division is now fighting for survival as it finds it increasingly difficult to get components and its brand is eroded."

For now the company is still the No. 2 phone maker in the world, and the newest addition to the Mate line, which has always been especially popular in China, could help buoy its sales for the next six months or so.

But while this might buy it some time, there's a huge question mark over what's next for Huawei phones. If analyst predictions are correct, the company might need to brace itself for a tumble down the global rankings. One report, from Digitimes Research in Taipei, has Huawei slipping down as far as seventh place by April 2021.

"Outside of China there is a real risk that the Huawei Mate 40 family of devices could be the company's last hurrah in smartphones," said Wood.

Huawei has a hidden advantage in its push for global dominance. Now the U.S. is trying to counter it. .
USAID announced a new financing plan to help countries buy from other telecom vendors. Early analysis suggests the incoming Biden administration may continue to see Huawei’s growing dominance as a security threat. While offering U.S.-backed loans to compete with Huawei marks a significant change in how Washington aims to push against Huawei’s success, there’s more to the company’s global reach than Chinese state-backed export loans. Beijing’s domestic support and influence in international organizations also help Huawei gain a competitive advantage.

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