Huawei teases tri-fold smartphone, raising competition with Apple in China

By David Kirton

SHENZHEN, China (Reuters) - China's Huawei Technologies unveils a three-way foldable phone on Tuesday, as it seeks to widen its lead over Apple in the world's biggest smartphone market with a new form factor that has gained popularity in the China market.

Just hours after Apple unveiled its latest iPhone model, Huawei is holding a launch event of the new Z-shaped smartphone Mate XT which was displayed on its flagship e-commerce stores in mainland China a day earlier.

Huawei's website showed on Tuesday that it had garnered more than 3.3 million pre-orders, for which no deposit is required, for the new smartphone.

By comparison, the entire global market for foldable phones was around 4 million units in the second quarter, according to research firm IDC.

The latest launch, which follows a series of successful smartphone debuts since last year, underscores Huawei's ability to navigate U.S. sanctions and solidifies its position against Apple in China.

Huawei already has two-way foldable phones in its lineup and their strong sales in China helped it overtake Samsung Electronics this year as the biggest vendor of such phones globally.

But the hefty price tag and limited quantity are likely to make the new model more of a symbol of Huawei's tech prowess than a major sales driver, analysts said.

"The upcoming Huawei products are not expected to significantly impact Samsung and Apple's businesses in terms of product quantity," said Jene Park, an analyst at research firm Counterpoint.

"There is a limit to the quantity of products supplied. However, there may be some impact on sales in certain Chinese markets."

The foldable smartphone market grew 57% year-on-year in the second quarter with 3.9 million units shipped, largely as Chinese smartphone makers pushed into overseas markets, according to consultancy IDC.

That still remains just 1.3% of the wider smartphone market, with 292.2 million smartphones shipped in the second quarter, IDC said.

"The average consumer still has limited knowledge about them, not to mention the benefits and value of the products," said Will Wong, a senior researcher with IDC.

High prices of such models remain another barrier. While the new model's price tag is unknown, last year's Mate X5 still retails for over 10,000 yuan ($1,406) domestically, almost twice as much as a new iPhone 15.

Overcoming issues such as screen wrinkles and reduced durability due to the use of more hinges will also be important for foldables' increasing usage, said Park.

Huawei ranked as the world's biggest foldable smartphone seller in the second quarter with a 27.5% market share, ahead of South Korea's Samsung, with 16.4%, according to IDC.

That share rises to 42% in China's home market, ahead of Vivo and former Huawei unit Honor, which it spun off under pressure from U.S. sanctions in 2020.

In the broader smartphone market in China, Apple's ranking fell from third to sixth place in the second quarter, as Huawei emerged as the third-largest vendor on the back of strong sales of its latest smartphones.

($1 = 7.1105 Chinese yuan renminbi)

(Reporting by David Kirton in Shenzhen and Hyunjoo Jin in Seoul; Editing by Miyoung Kim and Stephen Coates)