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Huawei’s Heavy Smartphone Discounts Keep It Ahead Of Apple Despite Sanctions

Huawei makes a mean smartphone. However, 2019 was an exceptionally tough year for the Chinese telecommunications company. US-led sanctions had barred it from accessing vital hardware and services vendors like Android, Intel and Broadcom.

To add insult to injury, Huawei’s headline-grabbing S$54 smartphone promotion last year in Singapore backfired spectacularly in what could only be described as a (social) media circus.

Since, they’ve made huge leaps in terms of damage control and launching new products. The Mate 30 Pro launched in September 2019 showcased probably the most sophisticated camera system on a smartphone amidst heavy competition. However, the lack of modern Android interface and lack of support for Google apps due to the ongoing sanctions gelded the phone’s functionality outside of China.

The Mate 30 Pro. Image: Huawei

To combat the sanctions, Huawei worked tirelessly with retailers to give guarantees that its pre-sanctions devices will continue to work with Android. After a spate of rumours, the company also revealed the development of Harmony OS, a possible Android alternative.

That Huawei still surpassed Apple in 2019 to cinch second place behind Samsung in terms of smartphone shipments, then, is astounding.

According to a report by Counterpoint Research, Huawei’s growth domestically on home turf was sufficient to send it hurtling to second place. China smartphone shipments comprised 60% of the company’s business, with Huawei controlling 40% of the Chinese smartphone market – both record numbers for the brand.

Outside of China, Huawei’s growth had been primarily supported by sales of older, pre-sanctions devices.

Evidence for its unbelievable performance seems to point in the direction of Huawei’s big discounts on its smartphones. The company’s S$54 Y6 Pro misadventure – what could have been its goal? While it could have been for a variety of reasons like stocks clearance and marketing, I posit that its overarching goal was to maintain smartphone sales despite waning consumer confidence post-sanctions.

Long lines of elderly queued in vain for Huawei’s $54 phone, intended to coincide with Singapore’s 54th year of independence. Image: Dave Wu

That, of course, isn’t a bulletproof theory. But look further afield at the Huawei Mate 30 Pro, and the uncanny stars of sales figure-boosting begin to align.

The Mate 30 Pro is a flagship with concomitant flagship pricing. At launch, it retailed for around EUR 1,099 (~USD 1,200/~SGD 1,664). That’s much in line with the Samsung S10‘s SGD 1,298 and the Apple iPhone 11 Pro‘s SGD 1,649 starting prices.

For a phone usually priced to compete with the flagship iPhone 11 Pro (SGD 1,649) and the Google Pixel 4 (SGD 1,319), Huawei doled out units of its flagship Mate 30 at heavy discount: SGD 786 in China at launch. Image: Ian Ling

Of course, you would be foolhardy to fork out that kind of money for a phone that doesn’t support essential Google services. But in China, that’s an entirely reasonable price to pay for a flagship smartphone that works even better than its last iteration … right?

Wrong. Huawei somehow deemed it fit to slash prices by up to 40%, with the base Mate 30 model coming in at CNY 3,999 (~SGD 786), 35% less than its launch price of EUR 799 (~CNY 6,150/~SGD 1,210) when it was announced at an event in Munich.

Huawei CEO Richard Yu announced the price cut at the start of sales, with the more powerful Mate 30 Pro sold out within the first day.

Huawei CEO Richard Yu at the launch of the Balong 5000 5G multi-mode chipset in January 2019. Image: Huawei

Obviously, this isn’t the first time companies have ostensibly utilised discounts and promotions to affect sales figures. However, with the ongoing US sanctions on Huawei faltering after the UK defied Trump in overturning the ban on the Chinese company for 5G telecommunications equipment just days ago, things are looking up for Huawei.

Ian Ling
http://uncommontragedy.com
Ian is the resident Tech Monkey and Head of Content at VR Zone. His training in Economics and Political Science is at the basis of his love for journalism and storytelling. A photographer by passion, and an audiophile by obsession, Ian is captivated by all forms of tech that makes enthusiasts tick.

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