In a surprising turn of events, Huawei Technologies has reclaimed the No. 1 spot in China’s smartphone market during the first two weeks of this year, according to a recent report by research firm Counterpoint. This marks a significant milestone for the Shenzhen-based company, as it’s the first time since facing US sanctions in May 2019 that Huawei has outpaced major mainland rivals and industry leader Apple.
The resurgence in Huawei’s smartphone sales can be attributed to the success of its Mate 60 Pro 5G, powered by the advanced Kirin 9000S processor, developed locally despite US tech sanctions. The introduction of HarmonyOS, the company’s Android replacement mobile platform, also played a pivotal role. Chinese consumers’ unwavering brand loyalty, coupled with the popularity of Huawei’s new 5G handsets, has intensified competition on the mainland against major domestic players, including Xiaomi, Oppo, and Vivo.
However, Huawei is not resting on its laurels in the smartphone arena. In a bold strategic move, the tech giant has decided to shift its production focus towards artificial intelligence (AI). The Ascend 910B, Huawei’s AI chip, is set to take center stage, even at the cost of slowing down the production of its successful Mate 60 smartphones in at least one factory.
The decision to prioritize AI chip production over smartphones underscores Huawei’s belief in the profound impact of AI on the tech industry. The Ascend 910B is a key player in developing AI models, and the growing demand for such chips in China aligns with the increasing challenges faced by Chinese AI developers in acquiring high-quality chips from abroad, given trade restrictions imposed by the United States.
By concentrating on the Ascend 910B, Huawei not only navigates around these challenges but positions itself as a crucial player in the burgeoning domestic AI market. This dual strategy places immense pressure on competitors, as Huawei aims to dominate both the smartphone and AI chip sectors in China’s tech landscape.
