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BEIJING – Fighting U.S. sanctions, Huawei unveiled a foldable smartphone with an 8-inch (20 cm) screen on Monday to showcase its technological prowess, but said it would be sold only in China.
Mate X2 highlights the challenges for Huawei Technologies Ltd. after Washington cut off access to U.S. processor chips and Google services. Last year, Huawei dropped from the best-selling global smartphone brand to sixth place.
Huawei says the Mate X2, its third foldable phone, has clearer looks and better sound for movies and games. It runs on Huawei’s most advanced processor chip, the Kirin 9000.
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The phone offers “a truly immersive experience,” said Huawei consumer unit president Richard Yu at a launch event broadcast online.
Huawei, China’s first global technology brand, was hampered by being placed on an export blacklist by then President Donald Trump in 2019 as a security risk, a charge the company denies. Huawei sold its low-cost Honor smartphone brand in November to focus resources on high-end models.
Mate X2 will start at 17,999 yuan ($ 2,785), according to Yu.
Fighting U.S. sanctions, Huawei unveiled a foldable smartphone with an 8-inch (20 cm) screen on Monday to showcase its technological prowess, but said it would be sold only in China.
Monday’s launch “says a lot about how the company still wants to flaunt its advances in technology, even if talking commercially, its shipments will be severely hampered,” said Bryan Ma of IDC in an email.
Executives previously said Huawei had stored chips and other components in preparation for a possible cut in the United States. It is not clear how long these supplies can last.
Huawei designed the Kirin line that powers its most advanced smartphones, but depends on outside manufacturers, including Taiwan’s TSMC to make them.
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The Trump administration stepped up sanctions last year, blocking TSMC and other global producers from using U.S. technology to make chips for Huawei, including those designed by the company.
Chinese officials accuse Washington of abusing national security claims to suppress rising tech competitors. Huawei denies accusations that it could facilitate Chinese espionage.
Without Google Music and other pre-installed services, Huawei’s smartphone sales, including Honor, fell 22% last year, to 188.5 million, according to Canalys.
Huawei founder Ren Zhengfei said on February 9 that he did not expect new U.S. President Joe Biden to lift Trump’s sanctions, but expressed confidence that the company can survive. Huawei, based in Shenzhen, southern China, is also the largest global manufacturer of switching equipment for telephone networks.
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Huawei’s smartphone unit increasingly depends on its domestic market in China, which represents more than 70% of sales, up from 50% in 2019. The loss of Google services has had no impact in China, where they are not licensed and Huawei already uses local alternatives.
The Communist Party of China has spent billions of dollars trying to build its own chip industry. But domestic producers lack the technology to manufacture chips for Huawei’s most advanced products.
“The big question is more about how long your current component inventory will last,” said Ma from IDC.
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Huawei has yet to report sales and profits in 2020, but Ren, the founder, said they were better than the previous year. Huawei said revenue in the first nine months of 2020 increased 9.9% to 671.3 billion yuan ($ 100.4 billion).