Chinese smartphone maker Huawei’s investments in research and development (R&D) are bearing fruit, as it continues to unveil flagship offerings, despite sanctions imposed by the US about four years ago.
Huawei Consumer Business Group held the Huawei P60 Series and flagship product launch event last night in Dubai, showcasing a new line-up. These include the Huawei P60 Pro, Mate X3, FreeBuds 5, Watch Ultimate, MatePad 11-inch 2023, as well as MateBook X Pro and MateBook D 14.
In 2019, Shenzhen-based Huawei was placed on a trade blacklist that restricted American companies from doing business with the Chinese provider of network equipment and smartphones.
The sanctions hit Huawei hard since it relied on Google services and other essential technologies for its handsets.
According to Statista, Huawei’s market share reached up to 20% in previous years; however, strong performance from rivals and the effects of the US trade ban have since seen Huawei fall outside the list of top five vendors by smartphone shipments.
Remaining undeterred
Commenting to the launch of the flagship P60 Pro, Arthur Goldstuck, MD of World Wide Worx, told ITWeb on the sidelines of the Dubai event that Huawei’s response to the US sanctions was opposite to what was expected, “which is that it would roll over and die as a mobile brand”.
He added: “Instead, it has redoubled its efforts to position itself as a leading mobile brand. In particular, it has dramatically upped the game in research and development.”
Since it was slapped with US sanctions in 2019, Huawei continues to strengthen investment in R&D, with an annual expenditure of $216 million in 2022. This represents 25.1% of the company’s annual revenue and brings its total R&D expenditure over the past 10 years to more than $1.4 billion.
Said Goldstuck: “Huawei’s commitment of 25% of revenue to R&D is unprecedented in the world of big tech. One can compare it to the massive investment that came into artificial intelligence (AI) in the last five years.
“It was inevitable that it was going to result in a massive breakthrough in AI capabilities, in the same way a company like Huawei is spending upward of R20 billion each year on R&D.”
According to Goldstuck, the P60 Pro seems to be the beginning of proving the dividend that comes from that investment.
This doesn’t mean Huawei is immune to sanctions, he added. “The reality is that it [Huawei] is pretty much locked out of the North American market, and by extension, much of Western Europe as well.
“But that means it has been forced to focus heavily on non-US-aligned markets like South America and the continent of Africa; especially in Africa, where we’ve seen the huge gains and market share it has achieved, as a result of being forced to focus on such markets.”
In the long-term, it could prove to be as much of a thorn in the flesh for US legislators, as the prospect three years ago that Huawei would become the number one smartphone maker, he commented.
“While that is unlikely to transpire, it’s very clear that for the foreseeable future, it will be one of the big three: comprised of Samsung, Apple and Huawei.”
Doubling up
Goldstuck believes the P60 Pro’s aesthetic and functional elements will appeal to prospective buyers, with the camera array designed to look like an old-style camera likely to attract traditional camera enthusiasts.
Commenting on the functionality, he noted: “During the launch, I did a 30-time zoom on the face of one of the presenters and was astonished at the detail that it produced, including cracks on the lips.”
Huawei also unboxed a foldable smartphone – the Mate X3.
“The foldable market is interesting in that it’s not yet a battle for market share, but rather for creating awareness and attracting people to the format.
“What we are seeing is not so much that Huawei devices are competing with those of Samsung or Oppo, but rather that it is providing an additional range of alternatives.”
Goldstuck noted the X3 is streamlined and thin. “Folding it and then comparing it to the P60 Pro in terms of thickness, it suggests that foldable phones are moving towards as being compact as regular smartphones for the same-sized device in its folded format.”
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