BEIJING – Huawei struggled under US sanctions and unveiled a foldable smartphone with an 8-inch (20 centimeters) wide screen on Monday to show off its technical prowess, but said it would only be sold in China.
Mate X2 highlights the challenges for Huawei Technologies Ltd. after Washington cut off access to US processor chips and Google services. Last year, Huawei dropped from the best-selling global smartphone brand to sixth place.
Huawei says that the Mate X2, the third foldable phone, has sharper images and better sound for movies and games. It runs on Huawei̵
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The phone offers “a truly immersive experience,” said the president of Huawei’s consumer unit, Richard Yu, at a launch event broadcast online.
Huawei, China’s first global technology brand, was hit by an export blacklist by then-President Donald Trump in 2019 as a security risk, an accusation the company denies. Huawei sold its budget-honored Honor smartphone brand in November to focus resources on advanced models.
According to Yu, the Mate X2 starts at 17,999 yuan ($ 2,785).
Monday’s launch “says a lot about how it will still trumpet its advances in technology, even though commercially, shipments will be severely hampered,” said Bryan Ma of IDC in an email.
Leaders said earlier that Huawei stored chips and other components in preparation for a possible cut-off in the United States. It is not clear how long these supplies can last.
Huawei designed the Kirin line, which operates its most advanced smartphones, but relies on external manufacturers, including Taiwan’s TSMC, to make them.
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The Trump administration stepped up sanctions last year by blocking TSMC and other global manufacturers from using US technology to make chips for Huawei, including those designed by the company.
Chinese officials accuse Washington of abusing national security complaints to suppress rising technology competitors. Huawei denies allegations that it could facilitate Chinese espionage.
Without Google Music and other services pre-installed, Huawei’s smartphone sales, including Honor, fell 22% last year to 188.5 million, according to Canalys.
Huawei’s founder, Ren Zhengfei, said on February 9 that he did not expect new US President Joe Biden to lift Trump’s sanctions, but expressed confidence that the company could survive. Headquartered in Shenzhen, southern China, Huawei is also the largest global manufacturer of telephone network switching equipment.
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Huawei’s smartphone device increasingly depends on the domestic market in China, which accounts for more than 70% of sales, up from 50% in 2019. The loss of Google services had no impact in China, where they are not licensed and Huawei already used local alternatives .
China’s ruling Communist Party has spent billions of dollars trying to build its own chip industry. But domestic manufacturers lack the technology to produce chips for Huawei’s most advanced products.
“The bigger question is more about how long their current stock of components will last them,” said IDC’s Ma.
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Huawei has not yet reported sales and profits in 2020, but Ren, the founder, said they were better than the year before. Huawei said revenue for the first nine months of 2020 rose 9.9% to 671.3 billion yuan ($ 100.4 billion).