Huawei's first 5G phone goes on sale in China as it pushes ahead with launch despite US pressure

Key Points
  • Huawei's Mate 20 X 5G smartphone went on sale on Friday.
  • It's capable of connecting to the next-generation 5G mobile networks which will begin rolling out in China later this year.
  • Huawei is pushing ahead with its product releases despite continued pressure from the U.S., which is reportedly considering whether to extend a special license for American companies to sell to the Chinese firm.
Trump says US will not do business with Huawei

Huawei's first 5G-capable smartphone went on sale in China over the weekend as the technology giant pushes ahead with new products despite pressure from the U.S.

5G refers to the next generation of mobile networks that promise super-fast data speeds and the ability to underpin technologies like driverless cars.

Huawei's Mate 20 X 5G — which costs 6,199 yuan ($880) — went on sale in China on Friday, and will be able to connect to those new networks.

China hasn't rolled out its 5G networks yet but they are expected to come online later this year in major cities and throughout the rest of the country in 2020.

Huawei wants to get ahead of its competition: Apple has yet to release a 5G phone, and Samsung's Galaxy Note 10+ 5G is not on sale in China yet.

The Chinese tech giant has upped its focus on its home market as it faces pressure from the U.S. The telecoms equipment maker is on a U.S. blacklist known as the Entity List, which restricts American firms from selling products to Huawei. The company was given a 90 day reprieve in which some of the restrictions were relaxed, but that ends on Monday.

According to Reuters and the Wall Street Journal, the U.S. government is looking to extend the license which would allow American firms to continue doing business with Huawei.

"China is now even more important, with the U.S. making it difficult for the company to sell its offerings outside China due to sanctions," Neil Shah, research director at Counterpoint Research, told CNBC.

Huawei shipped a record number of smartphones in China in the second quarter and the country accounted for 62% of its total shipments, according to data from market research firm IDC.

But China's smartphone market is also slowing down. According to Shah, 5G smartphones could help reignite growth and help Huawei push ahead of other rivals in the premium segment of the market.

"The China market has slowed down and consumers are replacing their phones slowly especially in the premium segment, thus the consumers are waiting for some latest and greatest tech to stimulate them to upgrade faster," Shah said.

The upcoming aggressive 5G rollout from Chinese operators and the availability of a 5G device from Huawei "should boost 5G devices adoption and further widen Huawei's competitive advantage in premium segment vs Apple."

Amid pressure from the U.S., Huawei has been focusing on trying to design more of its own components for its devices. The Mate 20 X 5G contains Huawei's Kirin 980 processor and its 5G modem.

Releasing in China will also help Huawei test its 5G modem in a flagship product, which could be important for future devices.

"This also gives them a chance to stretch their legs on their homegrown 5G modem, as they can learn from the experience of both implementation and production," Bryan Ma, vice president of client devices research at IDC, told CNBC.

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