Huawei reportedly takes 1st place in China’s phone market

The company was the top-selling smartphone brand in China in the first two weeks of 2024, according to the South China Morning Post citing a report from research firm Counterpoint Research. The firm noted that it’s the first time Huawei has taken first place since the U.S. put the company on a trade blacklist in 2019. (The U.S. accused Huawei of having ties to China’s military, charges the company denies.)

Last August, Huawei returned to the premium smartphone market with the Mate 60 series, featuring an advanced China-manufactured processor. The Kirin processor, made by Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC), is just a few generations behind the most advanced chips used in Apple’s latest iPhone. 

State media celebrated the release of the phone as proof of China’s ability to withstand U.S. export controls on sales of advanced chips and chipmaking equipment to Chinese companies.

Huawei’s gain is Apple’s loss. Last quarter, the U.S. tech company reported a 13% drop in sales in Greater China—which includes mainland China, Hong Kong and Taiwan. CEO Tim Cook called China the “most competitive smartphone market in the world” in an interview with Reuters last week. 

SMIC, which makes Huawei’s smartphone processors, reported $174.7 million in quarterly net income on Tuesday, ahead of analyst expectations of $139.1 million. 

Huawei’s AI chips

Yet Huawei’s ability to sustain its smartphone strengths could be constrained by another one of its successes: the company’s AI chips. 

Strong demand for the company’s Ascend AI chips is forcing the company to slow production of its smartphones, Reuters reported Monday, citing unnamed sources. Huawei reportedly uses one facility to produce both its smartphone processors and…