predicts Huawei’s recent Mate 60 Pro smartphone launch could hurt Apple’s business in China.
Huawei has been making waves after industry observers discovered the main chip inside the phone was manufactured on a 7-nanometer node. It marked a new milestone for China’s domestic chip-making industry for mass-market consumer device semiconductors. The Mate 60 Pro also has 5G functionality for faster connection speeds.
“We believe that Huawei has already been making a comeback in the China domestic smartphone market (initially with 4G models) and this announcement could help Huawei gain further market share domestically,” J.P. Morgan analyst Gokul Hariharan wrote in a note on Tuesday. “This is likely to halt iPhone market share gains in China and could put some downward pressure on iPhone 15 units post product launch this week.”
In early trading Tuesday,
(ticker: AAPL) were down 1.4% to $178.86 ahead of the company’s afternoon event when it is expected to unveil the iPhone 15. Apple couldn’t immediately be reached for comment.
The analyst also cited how Huawei had increased its share of the China phone market from 7% in the second quarter of 2022 to 13% in the second quarter of 2023, even though it had a slower 4G phone lineup. That bodes well for sales of Huawei’s newer 5G phone.
“iPhone share gains in China starting to flat-line, likely to see some share loss in the next two quarters,” he wrote.
According to Hariharan, rising tensions and geopolitics could become another risk for technology stock investors. Last week, The Wall Street Journal reported that China had ordered central government officials at some regulators not to use Apple‘s iPhone or other foreign-branded devices for work. The analyst is concerned the U.S. and China might have to increase trade restrictions following the latest developments.
“This is likely to weigh down near-term sentiment in the Asian Tech space, given a potential downtick for iPhone shipments, increased risk of restrictions, and limited beneficiaries from Huawei’s supply chain localization,” he wrote.
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