Huawei's Price Cuts and Slowing Foldable Phone Growth: A Deep Dive into 2024's Chinese Smartphone Market Trends

Huawei's Price Cuts and Slowing Foldable Phone Growth: A Deep Dive into 2024's Chinese Smartphone Market TrendsRecently, Huawei launched price reductions on several of its phone models, including the P60 series and Mate X5. The Huawei P60 Ultra received a discount of up to 2000, while the Mate X5 saw a 2500 price drop

Huawei's Price Cuts and Slowing Foldable Phone Growth: A Deep Dive into 2024's Chinese Smartphone Market Trends

Recently, Huawei launched price reductions on several of its phone models, including the P60 series and Mate X5. The Huawei P60 Ultra received a discount of up to 2000, while the Mate X5 saw a 2500 price drop. After the discounts, the P60 Ultra starts at 7499, the P60 Pro+ at 6699, the P60 Pro at 5399, and the P60 at 4699. The highly anticipated Mate X5 is now available for 10499. These price cuts have sparked widespread discussion regarding Huawei's strategy and the overall trends within the Chinese smartphone market.

• Huawei's price reductions are closely linked to the launch of its new products. At the end of November, Huawei unveiled the Mate70 series and the new foldable flagship, the Mate X6. A consumer electronics industry insider told the Sci-Tech Innovation Board Daily that discounting older models to clear inventory is standard industry practice, freeing up space for new product launches and stimulating market demand. They also predicted ample supply of the Mate70 series going forward.

Market data indicates a recovery in the Chinese smartphone market. A Counterpoint Research report shows a 2.3% year-on-year growth in smartphone sales during the third quarter of 2024, marking four consecutive quarters of positive year-on-year growth. The market is showing signs of recovery, and a low single-digit year-on-year growth is expected for the full year. If achieved, this would be the first year of growth in five years. Vivo, Huawei, and Xiaomi were particularly strong performers, occupying the top three spots in sales rankings and collectively driving a 3.8% year-on-year growth in the Android market.

However, it's noteworthy that the foldable phone market experienced a slowdown in growth during the third quarter. According to IDC, China's foldable phone shipments reached 2.23 million units in Q3 2024, showing year-on-year growth, but at a significantly slower pace than in the previous eight quarters. IDC attributes this to several factors, including a lack of broader use cases, high prices, and the absence of a clear usability advantage over straight smartphones, all of which have limited the expansion of the foldable phone user base.

Counterpoint Research also adopts a cautious outlook on the future of the foldable phone market. They predict that Chinese foldable phone shipments will reach 9.1 million units in 2024, representing a mere 2% year-on-year growth, far below the triple-digit growth seen previously. However, Counterpoint notes that despite the slowdown, foldable phones remain a bright spot in the saturated smartphone market, with innovative features and more appealing use cases key to future development.

Regarding specific foldable phone types, book-style foldables have outperformed clamshell foldables due to their wider range of applications. This year, OPPO and vivo ceased releasing clamshell phones, but Xiaomi bucked the trend, launching its first clamshell phone, the Mix Flip, in July, to positive market reception. Huawei, leveraging its leading position in the foldable phone sector, holds roughly half of the Chinese foldable phone market share. Its newly released Mate X6 and its first tri-fold phone further solidify Huawei's market leadership.

The Huawei P60 series, launched in April this year, is positioned as a flagship camera phone. The Mate X5, Huawei's previous generation foldable phone released in September 2023, was also included in the price reduction campaign. This promotional activity not only reflects Huawei's strategy of adjusting inventory to make way for new products but also highlights the intense competition in the current smartphone market.

Overall, the 2024 smartphone market shows signs of recovery, but the driving force is primarily straight smartphones. While the foldable phone market continues to grow, the pace has slowed significantly, and market penetration remains low. The future of the foldable phone market hinges on manufacturers' ability to break through in product innovation, expanding use cases, and lowering prices. Only through continuous innovation and improvement can more consumers be attracted, driving faster growth in the foldable phone market.

Huawei's price cuts have undoubtedly shaken the market and offered consumers more choices. However, this is just a snapshot of market competition; the future direction of the smartphone market remains uncertain. Manufacturers need to constantly adapt to market changes and enhance product competitiveness to survive the intense competition.

Huawei's remarkable success in the foldable phone sector and its strategic adjustment of older products after new product launches offer valuable lessons for other manufacturers. Successfully managing inventory while updating product lines and maximizing consumer satisfaction will be a common challenge for all phone manufacturers.

Looking back at the first three quarters of 2024, the Chinese smartphone market experienced a shift from stagnation to recovery. This reflects both an overall market rebound and manufacturers' proactive responses to market changes and adjustments to product strategies. Huawei's price cuts are a prime example of this proactive approach.

However, it's crucial to acknowledge that the foldable phone market, while possessing immense potential, still faces many challenges. Overcoming technological hurdles, enhancing user experience, and lowering prices will be critical for the future development of foldable phones. Only by addressing these issues can foldable phones truly become mainstream and enter every household.

In conclusion, the 2024 Chinese smartphone market presents a complex and dynamic landscape. The straight smartphone market is recovering, foldable phone growth is slowing, and competition among manufacturers is intensifying. Huawei's price cuts are just one of many market phenomena; they reflect the intense competition and indicate a future market brimming with both challenges and opportunities.