Apple and Huawei are engaged in a fierce battle for the Chinese smartphone market. Apple recently unveiled its iPhone 16 with new AI features, but these features will not be available in China until next year and require regulatory approval. Huawei responded by launching its tri-fold Mate XT smartphone, which features three screens and has garnered millions of pre-orders, though actual production volume faces challenges. Apple's market share in China has been declining, falling out of the top five smartphone brands, and its Greater China revenue dropped 7.4% year-on-year to $31.1 billion in the first half of the year. Some retailers are already cutting iPhone 16 prices by up to 11% due to anticipated soft demand.
Huawei's comeback is notable, with the Mate XT priced at $2,800, though analysts project limited shipments of around 1 million units despite the high pre-order numbers. The company has benefited from significant state subsidies, receiving $948 million from the Chinese government in 2022, more than double the previous year. Its Kirin 9000S chip, developed with state-backed SMIC, has helped Huawei reclaim market share.
Separately, Tesla CEO Elon Musk has strongly denied any plans to break off the company's operations in China, calling the country "awesome." These comments come amidst rumors about Tesla's strategy in the region. His mother also recently made a "Chinamaxxing" trip to the country, adding to the narrative around the Musks' positive view of China.
