Huawei this week revealed its newest foldable, the Huawei Mate X2. The newest flagship from the Chinese smartphone maker boasts a sizeable foldable display, and a sizeable price tag too.
Buyers will pay a lot for that large size. With a starting price of nearly $2,800 retail the Mate X2 costs almost 50% more than the Samsung Galaxy X Fold 2. This begs the question as to whether the price tag is worth it.
Huawei has gone to lengths to make the argument that the Mate X2 is indeed worth it. Huawei touted its larger size compared to the Fold 2. It also highlighted new hinge technology that prevents a hard crease from forming when the display was closed. The device overall, when closed, is relatively slim, due to an innovative wedge shape to the two halves of the device, allowing it to be 2mm thinner than the Fold 2, making the Mate X2 easier to carry in a pocket.
But not everything goes Huawei’s way in the comparison with Samsung’s foldable. Huawei does not have access to Samsung’s proprietary thin foldable glass cover for the display. This means that the display of the Mate X2 is less durable. It also means that the display of the Huawei foldable will develop ripples from opening and using the touch display, particularly where the display folds, and will be less durable over time.
Perhaps the biggest drawback to the Mate X2 is its lack of a proper Android OS and access to Google Mobile Services (GMS). GMS is the suite of applications and APIs that are found on nearly all Android smartphones outside of China, including applications like Chrome, Gmail, Google Maps, Google Play Store and YouTube. Instead of Android OS, the Mate X2 runs an Android fork. These choices are due to a technology ban instituted by the US Government stopping Huawei from using most technology developed or owned by US companies.
That technology ban also has implications for the Mate X2’s future. Since Huawei can no longer buy, for the most part, US technology, it is forced to rely on components stockpiled in 2020 in anticipation of the ban. At some point that stockpile will run out and Huawei will no longer be able to produce the Mate X2 (or any other 5G device).
Takeaways:
From our perspective, the Mate X2 is not technologically significant, in that it largely copies Samsung’s design, albeit with an arguably better hinge (arguably because it has not yet gone through outside testing, so we don’t know how well it will hold up over time). The original Mate, which used an outward folding design, was ditched by Huawei as it was too fragile. Essentially the Mate X2 is a copycat of Samsung’s better design.
So if the design is derivative, the price is astronomical, it lacks the world’s most popular smartphone OS and services and lack of components means that relatively few can be manufactured, why did Huawei introduce it this week?
Rather than looking at the introduction of the Mate X2 as a blueprint and roadmap for Huawei’s future smartphones, it should be viewed as a tool for Huawei to redirect the conversation about the company.
Much of the conversation about Huawei in 2020, particularly in the 2nd half of the year, was around predictions that the company was in a death spiral as the US technology ban strangled its ability to source necessary components to build network equipment and smartphones.
Clearly Huawei would like to redirect that conversation and show the world that it continues to innovate and introduce exciting new products. Taking aim at Samsung’s flagship foldable was an obvious choice, allowing Huawei to say that anything Samsung could do, it could do better.
Huawei’s goal is to get the media, analysts and consumers talking about its newest products and innovation, rather than its dire prospects if the trade ban continues. It would like to change the narrative from words like “embattled”, “shrinking”, “declining”, and “irrelevant” to more positive ones that reflect its own view that it is an innovative technological powerhouse and leader in 5G technology.
Even if Huawei eventually spins off its smartphone business, as it has already done with its Honor brand, it needs to ensure that a strong halo exists around those products. Managing market perception through a flashy new flagship is one way to do this.
Summary:
In summary the X2 announcement serves an important purpose in terms of pointing out the technological leadership and in building buzz at a time when Huawei’s phone business is on shaky ground. Will it move the needle in revenue or volume terms? No, but it was never intended to do so.
Strategy Analytics believes that the Mate X2 will be more concept than commercial success. Nevertheless, it is important in the evolution of foldable devices and bringing them to the mainstream. Overall we remain relatively bearish on foldable devices and leave our forecast unchanged at this time. Clear use cases for foldables are needed (as are more Android tablet apps oriented towards foldables). We believe there is a niche demand among professionals (architects, surveyors, engineers, etc.) and tech enthusiasts, as well among the conspicuous purchasers that Apple, Samsung and Huawei love. But crossing the chasm to mass consumers, or indeed the business market, will be a huge challenge. We anticipate global foldable display smartphone volumes in 2025 will fall in the 60M to 80M range. Clients can access our latest forecasts here.