Would You Pay $1,000 for a Smartphone Without 5G? Huawei Thinks So

FILE PHOTO: A man points a finger to the Google Play app logo on his Huawei smartphone in this illustration picture  May 20, 2019. REUTERS/Marko Djurica/Illustration/File Photo (REUTERS)
FILE PHOTO: A man points a finger to the Google Play app logo on his Huawei smartphone in this illustration picture May 20, 2019. REUTERS/Marko Djurica/Illustration/File Photo (REUTERS)

Summary

Chinese tech vendor’s new P60 smartphone is latest top-end device to launch without 5G, counting on camera and other features to stand out

Huawei Technologies Co. is doubling down on its bet that customers are willing to pay top dollar for a premium smartphone even if it doesn’t have 5G.

More than two years after U.S. sanctions wrecked the Chinese tech company’s once-dominant global smartphone business, Huawei is sticking with its regular schedule of new flagship launches with the debut of its P60 series of smartphones on Thursday.

Reflecting its reduced ambitions, Huawei unveiled the device in a Chinese-language event in Shanghai, rather than with a splashy launch overseas. It features a top-end camera—a Huawei trademark—but doesn’t have access to 5G networks, Google’s Android operating system or a host of Western apps. Huawei priced the basic model starting at 4,488 yuan, equivalent to about $652, and the upgraded P60 Pro model starting at 6,988 yuan (about $1,015).

That means the new phone, which Huawei launched alongside a new foldable phone and other gadgets, isn’t likely to find many users outside of Huawei’s home market. In China, where a separate ecosystem of apps and other software have made the absence of Western apps on Huawei devices less of a liability, the company continues to attract sales from longtime fans.

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Canalys/WSJ

Huawei was for a few months the world’s largest seller of smartphones globally, surpassing Apple Inc. and Samsung Electronics Co. Its global market share peaked at 18% in 2019, according to market tracker Canalys.

Then, the Trump administration imposed a series of export controls that choked the company’s access to foreign technologies. Sales crashed as the company carved off part of the business and its devices’ appeal withered in markets around the world.

Huawei’s market share stood at 2% last year, according to Canalys. Most remaining sales are in China. There the company clung to 8% of the market last year and was the country’s sixth-largest smartphone seller, behind the likes of Vivo Mobile Communication Co., the formerly Huawei-owned brand Honor Device Co. and Apple.

Executives have said the company has since replaced thousands of foreign parts. In pitching its smartphones, they have said the 4G connectivity is still powerful.

In China’s high-end phone sector, where Huawei’s rivals have struggled to gain traction, the company is the only serious rival to Apple. Huawei still held 10% of that market last year, according to Canalys.

The company has touted high-end photography and easy connectivity to other internet-connected Huawei gadgets.

Earlier this month, Richard Yu, the head of Huawei’s consumer business, posted on Chinese social media a zoomed-in photo taken at night of the top of a lit-up building which he said was taken on the P60 Pro. It showcased the device’s telephoto lens and nighttime photography capabilities. In a speech launching a predecessor to the P60, Mr. Yu said Huawei’s 4G connectivity was still powerful when coupled with artificial intelligence and other technology.

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Canalys/WSJ

One 38-year-old finance worker in Beijing said he has been using Huawei phones for several years since switching from an iPhone. The user said he transitioned to Huawei because he said the devices are more compatible with external devices like game emulators and run better apps, adding that his current device’s 4G speeds are fast enough.

Ren Zhengfei, Huawei’s founder, said last month that the company has substituted more than 13,000 components with domestic replacements in the last three years.

Still, the new smartphone underlines Huawei’s continued reliance on American technology for key parts.

Suppliers selling less than cutting-edge technology, like 4G, can apply for a license to transact with Huawei from the Commerce Department under rules issued by the agency overseeing export controls. The agency has cleared billions of dollars in such sales from U.S. suppliers including Intel Corp., which sells chips used in Huawei laptops, and Qualcomm Inc., which supplies 4G smartphone chips.

The Biden administration is considering tightening export rules to cut Huawei off from U.S.-sourced technology altogether.

Nicole Peng, a Canalys analyst, said one reason for Huawei’s enduring popularity in China is that for many, 5G hasn’t lived up to its billing as being a revolutionary improvement over 4G. Many smartphone users don’t really notice a difference, she said.

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