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Huawei Faces Challenges with Mate 70 Launch in China
SHANGHAI (Reuters) – Huawei’s latest smartphone, the Mate 70, is experiencing diminished consumer enthusiasm in China, raising concerns about the tech company’s forecasted shipment figures for the year. This trend may provide a competitive edge for Apple and other domestic brands, according to a report from brokerage Jefferies.
In a recent analysis, Jefferies noted a significant decline in online engagement surrounding the Mate 70 compared to previous launches. Their assessment, based on monitoring review frequencies and online discussions follow its launch on Tuesday, indicates “much less enthusiasm” from consumers.
As a result, Jefferies has revised its earlier prediction for Huawei’s shipments, lowering the estimated figure from 48 million devices for the year. The brokerage pointed out that Huawei’s earlier release, the Pura 70, has only managed to ship 5 million units since its launch in April.
Furthermore, the Mate 70’s predecessor, the Mate 60, which marked Huawei’s return to the high-end smartphone market, has shipped between 12 million and 13 million units to date, falling short of initial expectations of 15 to 16 million units. Jefferies analysts now suggest that the Mate 70 may not achieve higher sales volumes than its predecessor.
“We believe Mate 70’s ultimate sales volume could be below that of Mate 60,” noted the analysts, indicating a potential downside to Huawei’s shipment forecast, which could be beneficial for competitors, particularly Apple.
While Huawei has positioned the Mate 70 as its most advanced offering, feedback from analysts and consumers suggests that the improvements compared to earlier models may be limited. The Mate 60 initially captured attention for introducing advanced local chip manufacturing capabilities, overcoming challenges posed by U.S. sanctions. However, production improvements and performance enhancements appear to be lacking, leading to stock shortages shortly after its release.
Jefferies is also forecasting potential supply challenges for the Mate 70 related to chip production, similar to what was seen with its predecessor.
Toby Zhu, an analyst at Canalys, commented on the natural decline in consumer excitement following the initial buzz surrounding Huawei’s comeback. He anticipates that sales of the Mate 70 could see slight growth compared to the Mate 60 series, attributing this to an increase in flagship production capacity.
The patriotic sentiment surrounding Huawei and its technological advancements has played a significant role in the company’s market resurgence, intensifying rivalry with other smartphone manufacturers.
Recent data reveals Huawei’s strong position in the market, as it ranked as China’s second-largest smartphone vendor in the third quarter of 2024, achieving over 10 million unit deliveries for the fourth consecutive quarter. This marks a substantial recovery from the second quarter of 2022 when the company managed to ship only 4.1 million units.
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