Huawei May Overtake Apple, Samsung By Leveraging Cutting Edge AI Enabled Chipset

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On Monday, Huawei launched their newest flagship smartphones – the Huawei Mate 10 and Mate 10 Pro, in response to the launch of the Galaxy Note 8 and iPhone 8/8 Plus and iPhone X. Huawei’s latest flagship features most of the cutting edge features we are now used to seeing from a flagship smartphone in 2017, including a dual lens camera, an edge to edge display, fast charging and the AI (Artificial Intelligence) chipset known as Kirin 970.

While many of these features are impressive, what sets out the Mate 10 from the pack is the Kirin 970 SoC. The chip is Huawei’s most powerful SoC ever, despite being only the size of a thumbnail. However, setting aside clock speeds, cores and processor performance, the most enticing feature of this chip is its support for on-device artificial intelligence.

A while back, we reported on Apple’s plans to put a dedicated AI chip on its SoCs. Dubbed as the “Neural Engine”, the chip would open up a host of new possibilities including faster and more efficient AI and Virtual Digital Assistant (VDA) functionality, better battery life, offline VDA access, new security features, support for futuristic Augmented Reality and Virtual Reality tech and much more.

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These technologies and hardware pertaining to AI operations are currently ahead of the technology curve. To become a market leader in any segment of the technology industry, the ability to stay ahead of the curve is of vital importance, as evidenced by the successes of Apple Inc. (NASDAQ:AAPL), Samsung Electronics Co Ltd (KRX:005930) and Google. Now, Huawei seems to have understood this, and have joined the fray. This development can potentially send shockwaves throughout the industry, and change up the status quo.

When we think of the biggest players in the smartphone, our mind naturally goes to Samsung and Apple. However, now a third company has put itself up for the reckoning as well. According to data from IDC, Huawei shipped 38.5 million units of smartphones in Q2 2017, accounted for 11.3% share of the global market. This is just a whisper behind second-placed Apple, who shipped 41 million units of iPhones with a 12% market share. Looking at yearly growth rates, we find that Huawei far outpaces Apple with 19.6% YoY growth vs 1.5% YoY growth for Apple. This has led some analysts to conclude that Huawei may overtake Apple in terms of smartphone shipments and market share this year itself. This is not the limit of their ambition either, as Huawei aims to become number 1 in the near future.

Huawei’s shift in strategy is evident. They are now targeting the ultra-premium market dominated by Samsung and Apple. This is apparent in the Mate 10’s pricing, which will start at $825 for the base model and $943 for the Mate 10 Pro. Huawei’s cutting edge technology and feature offerings allow them to stand shoulder to shoulder with the big boys, even in terms of pricing. Their growth in Europe is promising, exceeded 50% in 1H 2017. If they are able to replicate this success in other markets such as the US as well, we may have a new smartphone king in the near future.

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