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Huawei launches new foldable phone as U.S. sanctions continue to hurt smartphone business

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Key Points
  • Huawei launched the Mate X2 foldable smartphone as it faces questions over the future of its handset business.
  • The Mate X2 will be one of the first Huawei phones able to run its own HarmonyOS mobile operating system.
  • The 256GB version will be priced at 17,999 yuan ($2,785) while the 512GB model will start at 18,999 yuan.
Richard Yu, CEO of Huawei's consumer business group, holds the company's new Mate X2 foldable smartphone during a virtual launch on February 22, 2021.
Huawei

GUANGZHOU, China — Huawei launched a foldable smartphone on Monday as it faces questions over the future of its handset business that has been hurt by a number of U.S. sanctions.

The Huawei Mate X2 launch highlights Huawei's continued push into the high-end smartphone space.

Some of Mate X2's key features include:

  • An exterior and interior screen that is presented when the phone is unfolded. The exterior display is 6.45-inch and the interior display is 8-inch.
  • A rear camera set up with 4 sensors for zooming and depth.
  • The processor is the Kirin 9000, Huawei's proprietary chip.
  • It will be one of the first Huawei phones able to run its own HarmonyOS mobile operating system.

The 256GB version will be priced at 17,999 yuan ($2,785) while the 512GB model will start at 18,999 yuan. It will be on sale in China from Feb. 25. Huawei did not say if it will be available in international markets.

Huawei continues to feel the pressure from U.S. sanctions enacted by the Trump administration which has damaged its smartphone business, in particular outside of China.

The Chinese firm shipped 32 million smartphones in the fourth quarter on 2020, down nearly 43% from last year and making it the sixth-biggest phone vendor by market share, according to Canalys. It's the first time Huawei has slipped out of the top five in six years, Canalys said.

Mate X2 production

Last year, the Trump administration moved to cut Huawei's access to chip supplies. Huawei designs its own range of chips called Kirin which are manufactured by Taiwan's TSMC. In May, the U.S. introduced a rule which requires foreign manufacturers using American chipmaking equipment to get a license before they're able to sell semiconductors to Huawei. 

Richard Yu, CEO of Huawei's consumer and cloud and artificial intelligence businesses, warned that Huawei could run out of chips.

But the Mate X2 uses Huawei's Kirin 9000 processor which was launched last year and Yu said the company has enough production capacity for the foldable phone.

"We are increasing our production capacity on a weekly and monthly basis," Yu said at the press conference to launch the phone.

The U.S.'s actions forced Huawei last year to sell-off its budget Honor brand of smartphone in order for it to survive, raising questions about whether the company might exit the business altogether. But Huawei founder Ren Zhengfei said this month that the technology giant would "never" sell its smartphone business.

HarmonyOS

In 2019, Huawei was put on a U.S. blacklist called the Entity List which restricted American firms from exporting technology to the Chinese company. One of the biggest blows to Huawei was being cut off from Google's Android operating system. That's not a big deal in China where Google services are blocked. But it is important for international customers and was one factor behind weakening international sales.

In response, Huawei launched its own mobile operating system called HarmonyOS. The company launched a second version of HarmonyOS last year and said it would come to phones in 2021.

On Monday, Yu said that Huawei users could begin upgrading their phones to HarmonyOS from April, with the Mate X2 being one of the first phones eligible. Huawei has been courting developers to build apps for its operating system.