Huawei is back: Once unveiled, it took three years to prepare

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Huawei did not hold a follow-up press conference for the Mate 60 series of mobile phones that have been on sale for nearly a month. After all, the biggest suspense is that the product configuration and price have been announced. But regardless of whether they are present or not, and how long they have been on the scene, the Mate 60 series and the Kirin 9000S chip it uses are the protagonists of this conference.

On September 25, Huawei held its 2023 Autumn “Full Scenario Press Conference” at the Shenzhen Chuncocoon Stadium. This is Huawei’s largest consumer hardware product launch in the past three years. The stadium, which can accommodate tens of thousands of people, is almost full. While waiting for the launch to begin, the audience shouted “far ahead” several times. This is Huawei’s terminal The mantra of business leader Yu Chengdong when launching new products. Less than 10 minutes into the press conference, the number of live viewers on Weibo alone exceeded 30 million.

What attracted everyone’s attention was not a new product launch, but a ceremony announcing a return.

Yu Chengdong did not mention much about the Mate60 series itself. He only said briefly at the beginning: “Thanks to the strong support of people across the country, we are working overtime to produce the Mate60 series (Mate60 series).”

Kirin 9000S has not appeared, but it is the key to creating the current situation. It is not the most advanced chip. According to multiple sources quoted by CCTV News, the Kirin 9000S in Huawei’s Mate 60 series uses a 7-nanometer process, which is still lagging behind the 3-nanometer chip used in Apple’s just-released iPhone 15 Pro.

But this is the first time Huawei has released a self-developed mobile phone chip with a data transmission speed of 5G after being repeatedly sanctioned by the United States. It is made of a 7-nanometer process, one generation ahead of the 10-nanometer technology strictly restricted by the United States. At the same time, Huawei’s newly released tablets, TVs, and headphones are all equipped with new chips developed by Huawei.

But the important thing is not only that Huawei’s mobile phones and other equipment finally have self-developed chips available again, but also that a powerful positive cycle of technology investment has started to rotate efficiently again: using advanced technology to improve the competitiveness of products and sell them to more With more people, we can gain more profits, invest more, continue to develop new technologies, and create new, competitive products.

Huawei was the winner in this cycle: in 2018, it announced the 7-nanometer chip Kirin 9000 before Apple. In the mobile phone market, advanced chips and other technologies helped Huawei once surpass Apple and Samsung, and reach the top of the global mobile phone market in the second quarter of 2020. Huawei is also the only mobile phone company in China that has firmly established itself in the high-end market.

It was also during this period of peak sales that Huawei’s once-strong technology research and development cycle encountered a crisis, and every link was shaken. First is consumption: In 2019, Huawei mobile phones can no longer use the Google service suite (app store, mailbox, maps, etc.), which affects overseas sales; then there is supply: a more stringent ban in 2020 will cut off the supply of OEMs such as TSMC to Huawei It is possible to produce 10nm and more advanced chips, and Huawei can no longer buy or find companies to produce 5G chips.

Both supply and demand ends are clamped down, ultimately hitting Huawei’s mobile phone business’s overall revenue and profits that can be reinvested. In the past few years, Huawei’s mobile phone market share once dropped to 7.9%, only a quarter of its peak, and its revenue has also been cut in half.


Now, the Mate60 series equipped with Kirin 9000S has changed Huawei’s situation. From supply to consumption, Huawei’s positive cycle is recovering.

“LatePost” learned that, stimulated by the Mate 60 series of products, Huawei predicts that its mobile phone shipments will reach 35 million units this year, 1.5 times that of last year, and sales will reach 60 million units next year. This is 7 million units more than vivo, which sold the most mobile phones in China last year (data from market research agency IDC). A manager from another mobile phone company predicted that within one year, Huawei’s mobile phone share will return to the top spot in the Chinese market.


After three years of hibernation, the grandest press conference

In 2020 and before, Huawei’s launch conferences for mobile phones and other products in the fall were extremely grand, and it seemed to be competing with Apple. Domestic competitors are struggling to cope with Huawei’s offensive. Yu Chengdong once mentioned publicly that a domestic peer would even ask him to show mercy, otherwise the company might collapse. But in the past two years, Huawei, which has been trapped in chips, can only stay dormant:

  • In 2021, Huawei stopped updating its Mate series of mobile phones and only moved out products such as laptops, printers, monitors, and all-in-one PCs at the press conference. The duration of the press conference was shortened from more than an hour to 45 minutes.
  • In 2022, Huawei released the Mate 50 series. Yu Chengdong spent nearly an hour introducing the anti-fall screen, camera optimization and satellite communication functions of the new phone. He did not mention a word about the Qualcomm chip equipped on the phone and the lack of support for 5G. Originally, chips were the focus of Huawei’s new Mate series products.

This year, even though the Mate 60 has been on sale for nearly a month, Huawei still held this massive launch conference. It was a ceremony announcing its return, showing Huawei’s readiness to take off after three years of hibernation.

At the press conference, Huawei launched the ultra-high-end brand ULTIMATE DESIGN and announced its first product, a gold smart watch priced at 21,999 yuan. It is made of 18K gold and has a mechanical watch shape. It can send and receive Beidou satellite messages. , supports 100-meter deep dive.

An arrangement that was not disclosed in advance is that the well-known actor Andy Lau will appear at the press conference as the ULTIMATE DESIGN brand ambassador. Huawei has never hired a brand ambassador or spokesperson for its high-end P and Mate series in the Chinese market.

After the meeting, Huawei released two new mobile phones, the Mate 60 Pro+ and the Mate 60 RS, which belongs to the ULTIMATE DESIGN high-end brand line, on its official blog, priced at 8,999-12,999 yuan.


Mate60 Pro+ (left), Mate 60 RS (right), pictures from Huawei.

Huawei has also launched a series of Hongmeng ecological devices, many of which are equipped with Huawei’s new self-developed chips:

  • The 13.2-inch tablet MatePad Pro is the largest screen tablet released by Huawei, priced from 5,199 yuan. Yu Chengdong did not disclose what chip Matepad Pro uses, but emphasized that like mobile phone products, “all flagship chips are used.”
  • The 98-inch/85-inch TV V5 Pro, Huawei said, is “not just a TV, but also a super-large-screen mobile phone.” It is equipped with Huawei’s self-developed TV main chip Honghu 900, which is faster than the Honghu 818 (28 nm process) released by Huawei in 2019. ) has doubled its computing power, and added NPU for AI calculations in addition to CPU and GPU. The price is 36,999 yuan (98-inch) and 24,999 yuan (85-inch).
  • Wireless Bluetooth headset FreeBuds Pro 3, priced at 1,499 yuan, uses the latest Kirin A2 chip, which is an updated version of the Kirin A1 released by Huawei in 2019. He Gang, chief operating officer of Huawei Device BG, said that Kirin A2 can make headphones have better noise reduction effect and sound quality, and lower power consumption.

Huawei has also updated its smart glasses, smart watches, and routers, and announced that the Zhijie S7 (coupe) and Wenjie M9 (SUV) will be launched in November and December. Yu Chengdong mentioned that since the release of Wenjie M7, the average daily orders have exceeded 1,500 units, and the number of users who have paid non-refundable deposits has exceeded 20,000. The M9, which will be launched in December, will be “the best within 10 million yuan.” SUV”.


Products displayed at Huawei’s 2023 Autumn All-Scene Press Conference, pictures from Huawei.

Yu Chengdong also announced that Hongmeng system will usher in a new version and fully launch the Hongmeng native application plan. He said that 60 million devices have been upgraded to Hongmeng OS 4, which was released in early August this year, with 1.2 million new users every day.

Compared with the previous three years of press conferences, Yu Chengdong looked more confident at this press conference. When he took the stage, he smiled and waved, walked fast and had strong steps. According to data obtained by LatePost, 276,000 Mate 60 Pro units were sold in the first week after it went on sale, which exceeded the results of most domestic manufacturers when they released similar-priced mobile phones.





“Huawei has also said hello to channel vendors to try to keep the price of mobile phones down and not to increase prices due to shortages.” A person close to Huawei said. During the difficult period of Huawei’s mobile phone business in the past few years, channel vendors have spent more time thinking of ways to keep mobile phone prices from falling.

According to LatePost, Huawei estimates that the Mate 60 series will sell 5 to 6 million units this year. “A Chinese mobile phone with a similar price range is considered a big hit if more than 1 million units are sold within six months of its release,” said a mobile phone industry analyst.

The past three years: retaining users, developing revenue, and maintaining a positive cycle

The rapid rebound of Huawei’s mobile phone business has not only benefited from the brand bonus brought about by the suppression in the past few years, but also benefited from Huawei’s painstaking management, which has allowed it to retain a group of loyal users. According to data from Aurora’s Yuehu iApp, as of August this year, about 15 out of every 100 mobile phone users in the Chinese market were using Huawei phones, which is lower than Apple and OPPO, but higher than vivo, Xiaomi, and Honor. and other brands.


When it encountered severe sanctions in 2020, Huawei had the confidence to return to the mobile phone market. “Huawei will not withdraw from the mobile phone market, and Huawei’s mobile phone business will definitely be there.” A Huawei mobile phone business executive told LatePost at the time, “There is always a way to solve the supply of high-end chips.”

It is understood that at that time, Huawei executives mentioned internally many times that the supply problem of high-end chips would be solved in about two years. Huawei’s strategy is to develop new revenue as much as possible during the two most difficult years, maintain business operations, keep consumers in Huawei’s system, and wait for high-end chips to break through and return to the market again.

Huawei decisively divested its mobile phone brands Honor and Maimang and other businesses, earning its first net income of 57.4 billion yuan in 2021. Its total profit has also increased from more than 60 billion yuan in the previous two years to more than 110 billion yuan. Huawei itself retains the high-end P and Mate mobile phone series, the mid-range Nova and the low-end Changxiang series.

Huawei also licenses its technology and mobile phone design solutions to external parties, and the development is led by operators such as China Telecom, China Mobile, and China Unicom, and companies such as TD Tech. Some of these mobile phones will be sold in the “Smart Phone Selection” section of Huawei’s official website and some of Huawei’s offline channels.

Since the operating entity has nothing to do with Huawei, these brands can purchase 5G chips. Most customized mobile phones related to Huawei are very similar to Huawei products. For example, the TD Qiao M40 launched last year has almost the same appearance as the Huawei Mate 40. The licensing business also brings a certain amount of income to Huawei.


TD Tech M40 (left) and Huawei Mate 40 (right).

Although the cycle from profits to investment has been impacted, Huawei has not cut back on R&D investment. In the past three years, Huawei’s revenue has been reduced by 30% from 891.4 billion yuan to 642.3 billion yuan, and its research and development expenditure has increased by 14% from 141.8 billion yuan to 161.5 billion yuan.

The results of high R&D investment are not only the Kirin 9000S, but also include a series of mobile phone technologies other than chips. Huawei is working harder to develop and iteratively promote the Hongmeng operating system. The “computational optics” technology used for the first time on Huawei P50 emphasizes algorithms to compensate for image quality loss, allowing users to take clearer and more realistic photos; in China, the unique satellite communication function of Huawei mobile phones allows users to capture photos even when there is no signal. It can rely on satellites to communicate with the outside world; the “Kunlun Glass” installed for the first time on the Mate 50 series improves the anti-fall ability of the whole machine; the water drop-shaped hinge technology first launched on the folding screen mobile phone Mate X2 dilutes the screen creases. Huawei is now the largest seller in China The company that makes foldable screen mobile phones has a market share of over 40%.

In this process, Huawei is engaging Chinese companies in the supply chain to invest in research and development: the satellite communication function of mobile phones is jointly developed by Huawei and Huali Chuangtong; Kunlun glass is supplied by Chongqing Xinjing, which replaces Huawei’s past glass supplier Corning of the United States; the water-drop hinge was developed by Huawei in cooperation with Dongmu Co., Ltd., Dafu Technology, etc.

These product optimizations have made up to a certain extent the disadvantage that Huawei mobile phones could only use 4G chips before the release of the Mate60 series. According to data from market research firm IDC, in the second quarter of 2023, even though the now popular Mate 60 series has not yet been released, Huawei’s mobile phone market share in the Chinese market has climbed from a low of less than 8% to about 13%, which is only 13% higher than fifth-place Xiaomi. 0.1% less.

For those users who want to continue to experience the “full version” of Huawei mobile phones, Huawei provides the ultimate repair and upgrade services than all competitors, and strives to extend the time that old users can use Huawei mobile phones.

In 2022, Huawei has supported the replacement of Kunlun glass screens for old flagship series such as Mate 40 and 30. The cost starts at 589 yuan. It costs about 2,000 yuan to replace the iPhone screen. Users only need to spend 99 yuan to replace more than 70 Huawei mobile phones. A brand new battery, while it costs more than 700 yuan to replace a new iPhone battery; it only costs 492 yuan to upgrade the mobile phone hardware memory of the Mate 30 Pro from 128GB to 256GB. A few other mobile phone brands that provide similar services often need 800 yuan to upgrade the same memory. -900 yuan.

In addition to mobile phones, Huawei continues to launch consumer electronics products that are less dependent on advanced chips. It is understood that even in the most difficult years, Huawei’s mobile phone business did not take the initiative to lay off large-scale layoffs. A large number of employees in the mobile phone department were transferred to tablet, watch, TV and other departments. These products have improved Huawei’s IoT ecosystem and partially made up for the loss in mobile phone sales.

Huawei no longer only focuses on individual consumers. In 2021, Huawei Consumer BG, which originally focused on mobile phones as its main business, changed its name to Terminal BG, expanded its commercial office products such as desktops, all-in-one computers, and large monitors, and even started to build printers, and began to sell more equipment to governments and schools. , hospitals, mines, factories and banks.

For example, Huawei sells smart watches to Shandong Energy Group. These watches can remotely monitor the heart rate, blood oxygen, body temperature and other indicators of underground workers. In case of danger, the watches can alarm in real time and send out positioning signals to help rescue. “Similar orders from a single large customer can produce tens of thousands of shipments per year.” A Huawei source told LatePost.

According to Huawei’s annual report, in 2021, Huawei’s wearable device and smart screen business revenue will increase by more than 30% year-on-year.

With the continuously enriched IoT ecosystem and the continuously updated Hongmeng system, Huawei gives users reasons to stay: they can buy new products that are not so perfect but have bright spots, and they can also extend the use of old mobile phones through various upgrade services. Time to wait for major updates in the future.

In August this year, He Gang, chief operating officer of Huawei Device BG, said that the replacement cycle of Huawei mobile phone users is three months longer than the industry average.

Relying on more diversified products and automobile business, Huawei has also preserved its sales network as much as possible, which is another support for Huawei’s rebound. In 2022, there will be 60,000 stores and counters selling Huawei products, only 5,000 fewer than in 2019.

Amidst the difficulties, Huawei managed to maintain a positive cycle from good products to consumers paying, and then using revenue and profits to invest in new technologies. The Kirin 9000S and a series of new chips installed in Huawei’s new products are one of the results of this effort and are also the starting point for the new cycle to start turning vigorously.

When the market is big enough, technological development will always find a way out

Before the Age of Discovery, Venice had controlled glass craftsmanship for more than 200 years by relying on strict technical blockades and prohibiting workers from leaving closed production areas. The glass produced on Venice’s Murano Island earned money all over Europe and even further afield.

After the industrial revolution, the global division of labor system became increasingly developed, and strictly blocking a technology was no longer effective in the long term. The atomic bomb is a classic example. The United States was the first to master atomic bomb technology in 1945. Just four years later, the Soviet Union successfully reproduced it, followed by the United Kingdom, France, China, India and Pakistan… The principles and manufacturing methods of atomic bombs are no longer a secret.

The same is true for chips. When latecomers replicate established technologies, they will be limited by equipment and raw materials. However, with firm investment, short-term breakthroughs are not impossible.

But unlike the atomic bomb, chips are no longer a military technology. The chip was born nearly 60 years ago. In the early days of its invention, its biggest usage scenarios were indeed moon landing programs and missiles. But missiles and chips alone cannot become the cornerstone of the information age.

What really makes the chip flourish is the endless consumer demand: from the first Japanese calculator using Intel 4004 processor, to later personal computers, office software to assist white-collar workers, and video games for teenagers to entertain themselves, to annual sales of 1 billion Taiwan’s smartphones…the insatiable desire for consumption has contributed to the current importance of chips and the huge scale of the industry: only when continuous consumption is transformed into the income and profits of many companies can long-term investment in advanced technology be brought about. Requires huge amounts of resources.

Chip industry chain companies such as Apple, Huawei, Samsung, Qualcomm, Nvidia, and TSMC are all trying to keep themselves in this cycle, making profits from good products, and then using the profits to invest to stay ahead.

Huawei’s products have once again won the favor of a large number of consumers. Huawei will have more funds to invest in technology research and development. These investments will also penetrate into the supply chain, driving the development of more Chinese companies and leading to breakthroughs in more links. For example, chip design is inseparable from EDA software. In the past, Chinese companies could not do the entire process, but could only do a single point, and their adapted processes were not advanced enough. In March this year, through cooperation, a group of Chinese companies were able to domestically produce EDA software supporting the 14-nanometer process.

China has a large domestic market that is rare in the world. When demand is strong enough, technological development will find its way.

Source of title picture: Huawei Terminal Weibo

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