The electrifying release of the 5G Mate 60 series leaves a major impact on Huawei's bottom line - PhoneArena
On the last day of August, Huawei shocked the smartphone industry by announcing its new Mate 60 flagship line . The company, despite facing U.S. sanctions that prevent it from obtaining cutting-edge chips, equipped the Mate 60, Mate 60 Pro, Mate 60 Pro+, and the Mare 60 RS with a 7nm homegrown Kirin 9000s application processor (AP) that supports 5G. The Mate 60 series featured the first 5G phones from Huawei since 2020's Mate 40 series which was powered by the Kirin 9000 chipset.
The introduction of the Mate 60 series with its 5G chipset shocked the smartphone world
The chip was reportedly made by China's largest foundry, SMIC, which is limited to previous-generation lithography equipment. Still, with tools obtained from other companies, SMIC used its Deep Ultraviolet Lithography machine and was able to give Huawei the 5G chips its previous flagship phones were unable to use. The Mate 50 series from 2022 and the P60 line from earlier this year were powered by the Snapdragon 8+ Gen 1 SoC. Huawei received a license allowing it to buy the older but still powerful chip because it was tweaked so as not to support 5G signals.
The Huawei Mate 60 Pro
But thanks to the Mate 60 line and the Kirin 9000s AP, Huawei sent a jolt of electricity through the Chinese smartphone market which is the top smartphone market in the world ahead of India and the U.S. This has led Huawei to report that third-quarter profits soared 118% in the period to 26.4 billion yuan ($3.6 billion) despite only a small hike in sales to 145.7 billion yuan. Being able to use your own chips will greatly improve your profit margin.
Huawei's phones have Chinese consumers buzzing but the company still struggles to regain its status in China
Huawei had once dominated phone sales in China. During the third quarter of 2019, before the effects of the U.S. sanctions were felt, the company had a 42.4% share of the smartphone market in China and reported an incredible 66% year-over-year gain in domestic shipments for the three months.
And while the Mate 50 series released last year had consumers in China waiting in line , the company sold off its Honor sub-unit for an estimated $15 billion in 2020 to help Honor break away from the U.S. sanctions. While the sale raised much-needed funds for Huawei, it also created a new competitor in China. Last quarter, Honor had the largest slice of the Chinese smartphone market with an 18% share. Oppo and Apple were next with both achieving a market share of 16%.
In a statement, Huawei said, "We continue to optimize our management systems, improve the efficiency and quality of our operations, and refine our sales strategy and product mix. These actions have had a very positive impact on our profit margin."