Excitement over the Mate 70 series down sharply compared to last year's Mate 60 line
Two color options for the top-of-the-line Huawei Mate 70 RS Unlimited Design. | Image credit-Huawei
In August of 2023, Huawei shocked the smartphone industry by unveiling the flagship Mate 60 series. Despite U.S. sanctions that prevented Huawei from powering its phones with application processors that support 5G connectivity, the Chinese manufacturer was able to have China's top foundry, SMIC, supply it with the Kirin 9000s SoC. Designed by Huawei and built by SMIC using its 7nm node, the Kirin 9000s allowed the Mate 60 to be the first Huawei flagship to support 5G since 2020's Mate 40 line.
There was big excitement in China over Huawei's ability to offer its first 5G flagship phone in three years. Nationalism also surfaced when Huawei was able to create its own 5G application processor despite the export rule change put in place by the U.S. to keep 5G chipsets out of Huawei's hands. As you might have expected, at first the Mate 60 line sold like hotcakes in China.
Now, more than a year later, Huawei has introduced the Mate 70 series and the big news is that premium models like the Mate 70 Pro, Mate 70 Pro+, and the Mate 70 RS Ultimate Design will be powered by the Kirin 9100 AP. This chipset is rumored to have been produced by SMIC's 6nm node. Since extreme ultraviolet (EUV) lithography machines are banned from being shipped to China and sold to Chinese firms, SMIC had to use older deep ultraviolet (DUV) lithography machines and employ multiple exposures to make sure that complex circuitry was etched on silicon wafers.
The top-of-the-line Huawei Mate 70 RS Ultimate Design. | Image credit-Huawei
DUV machines are typically not used to produce chipsets with a lower than 7nm node. However, since it is unable to obtain EUV technology, SMIC had to use multiple exposures with DUV which resulted in longer production times, higher costs, lower yields, and misaligned patterns.
A new report says that the excitement in China that bordered on nationalism for last year's Mate 60 is not being repeated this year with the Mate 70 line. Brokerage firm Jefferies, in a note published on Thanksgiving Day, said that there is "much less enthusiasm" for the Mate 70 series based on reviews and online comments. As a result, the iPhone might benefit in China from the declining excitement over Huawei's 2024 flagship line.
Jefferies earlier this year estimated that Huawei would ship 48 million phones in China this year. But the Pura 70 line, Huawei's photography-based flagship, sold only 5 million units this year. And the Mate 60 series has sold 12 million-13 million units to date, below earlier estimates of 15 million-16 million. Jefferies analysts say that the Mate 70 could sell fewer units than its predecessor.
"We believe Mate 70's ultimate sales volume could be below that of Mate 60. It seems our Huawei shipment forecast of 48 million this year has downside, which is positive for iPhone and other brands."-Jefferies
While Huawei says that the Mate 70 series contains the most powerful Huawei phones ever made, both consumers and analysts say that the improvements are limited. Jefferies says that no improvement in production yield means that shortages of the Mate 60 that surfaced when the phone was first released last year, will occur again when the Mate 70 series is launched.
Canalys analyst Toby Zhu has a slightly different outlook than his counterpart at Jefferies. He sees sales of the Mate 70 to end up slightly ahead of the Mate 60.
Huawei was the second largest phone manufacturer in China during Q3 with shipments topping 10 million units for the fourth consecutive quarter. The firm is on the comeback trail. After all, during the second quarter of 2022, Huawei shipped only 4.1 million units.
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