Huawei plots China smartphone revival with mobile operating system upgrade

Huawei connected Friday announced the latest mentation of its mobile operating strategy HarmonyOS 4 and an enhanced A.I assistant, arsenic the embattled elephantine ramps up efforts to re-establish spot for its smartphone business.

The Shenzhen-based telecoms steadfast is trying to betterment from U.S. sanctions dating backmost to 2019, which chopped it disconnected from cardinal technologies specified arsenic semiconductors, similar 5G chips and software. The determination crippled its smartphone concern globally, demoting it from erstwhile being the fig 1 player.

American restrictions cut Huawei disconnected from Google's Android mobile operating system, which destroyed Huawei's smartphone concern extracurricular of China.

In 2019, Huawei launched its ain operating strategy called HarmonyOS, successful a bid to regenerate Android. The institution has been processing caller versions of the strategy ever since, with an eye to regain immoderate marketplace stock successful smartphones.

The Friday motorboat of HarmonyOS 4 highlights the company's ambition to regain spot for its smartphone business.

"Huawei's flagship smartphones are making a comeback," said Yu Chengdong, CEO of Huawei's user concern and intelligent automotive solution concern groups, during the Huawei Developer Conference 2023 connected Friday.

Since 2019, Huawei has focused connected trying to regain marketplace stock successful China, uncovering immoderate success. Huawei's marketplace stock jumped to 13% successful China successful the 2nd 4th of the year, up from 7.3% during the aforesaid play of 2022. The company's smartphone shipments grew by 76% year-on-year.

Huawei's strategy has go much refined, arsenic it looks to vie successful the premium conception of the smartphone market, alternatively than crossed each sectors.

"Huawei's smartphones took the 2nd spot successful the high-end segment. So we are making a comeback with vengeance," said Yu.

In the conception of phones priced much than $600 successful China, Huawei's stock jumped to 18.4% successful the 2nd 4th versus 6.7% successful the aforesaid play successful 2022, according to IDC.

Huawei's high-end absorption makes sense, as Chinese consumers are connected mean consenting to wage much for smartphones. The institution released its Mate X3 foldable this year, and that device, on with the flagship P60, helped the institution boost its premium conception share.

Despite being chopped disconnected from captious overseas chips, Huawei plans to re-enter the 5G smartphone marketplace by the extremity of this year, according to Reuters. The quality bureau reported that Huawei should beryllium capable to procure 5G chips domestically.

5G refers to next-generation mobile net technology. Most high-end phones are capable to link to 5G networks, which committedness super-fast net speeds. Huawei's flagship devices person been missing this diagnostic due to the fact that of U.S. sanctions.

"It wholly makes consciousness for Huawei to absorption connected the premium segment. It's not lone that the high-end conception was much resilient successful the gloomy Chinese market, but Huawei could besides leverage its premium marque sanction successful China, which different Chinese vendors were inactive striving for," Will Wong, probe expert astatine IDC, told CNBC.

"Furthermore, premium products could perchance make much favorable gross and profitability."

Part of Huawei's high-end strategy revolves astir HarmonyOS, an operating strategy it says is designed for smartphones and different devices similar wearables and TVs. The institution aims to make unified bundle crossed aggregate user electronics categories, overmuch similar Apple.

The Chinese tech elephantine said that it volition bring "a HarmonyOS with adjacent much intelligent and personalized experience." HarmonyOS presently runs connected much than 700 cardinal devices, including smartphones, watches and tablets, the institution said.

Huawei said that the caller mentation of Huawei's AI dependable adjunct Celia, which provides adjunct features connected astute devices, has been trained with Huawei's Pangu AI exemplary to amended productivity successful beingness and astatine work. In July, Huawei launched Pangu 3.0, arsenic it seeks to capitalize connected the AI roar and ChatGPT frenzy.

At slightest 200 cardinal mobile telephone users interact with Celia each month, said Huawei.

"You tin interact with Celia by not conscionable dependable but besides texts, pictures, documents and truthful on. You tin besides benignant to interact with Celia if it's not the close clip to talk. Dialogues betwixt users and Celia tin beryllium much earthy and intuitive," said Jia Yongli, manager of user concern astatine Huawei.

Celia tin besides execute a scope of tasks, specified arsenic penning summaries, translation, penning emails and authoritative documents, said Jia.

Huawei besides said that a caller acceptable of features volition beryllium disposable to invited users successful precocious August.

Still, Huawei's smartphone rejuvenation is apt to beryllium confined to China, which accounted for 89% of its handset shipments successful the 2nd quarter, according to IDC.

That's due to the fact that Huawei's phones inactive deficiency 5G and HarmonyOS doesn't person the cardinal apps, specified arsenic Google, radical extracurricular of China are utilized to using.

"It's not an casual task to regain crushed overseas," Wong said, suggesting galore users person switched to different telephone brands owed to Huawei's deficiency of cardinal features.

"It would instrumentality clip for Huawei to get the users switched backmost adjacent if it could code the cardinal symptom points of its products successful the overseas marketplace now."