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Apple (AAPL) is getting hammered from all sides in China, the world's largest smartphone market. Huawei, its chief rival in China, shocked the market last year by producing a 7-nanometer chip and a new line of smart devices called the Mate 60.
The Mate 60 immediately grabbed market share from Apple, leading to a sharp drop in their Q1 results.
Then, the Chinese government announced that iPhones would be banned for use by government officials, including municipal-level authorities and agencies, and state-owned firms.
Huawei's new Pura-70 is aimed at Apple's high-end users. Typically smartphone manufacturers compete against Apple on the basis of price: comparable features, but at steep discounts to the iPhone. But Huawei's new offering is priced almost the same, and features state-of-the-art camera aperture technology that is novel to smartphones. They have priced the -70 at just a slight discount to the iPhone 15, but at parity for the premium models. Their pricing strategy implies that Huawei's Pura-70 is equal on the basis of features and quality, and they are going after the highest-margin consumers.
Apple now faces formidable competition from Huawei on the mass-market side with the Mate-60, on the high end with the Pura-70, while under the cloud of the Chinese government's restrictions on iPhone purchases by government employees, state-owned firms--and anyone who hopes to do business with them.
Resources and links:
Bloomberg, Huawei unveils new smartphone lineup
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Zerohedge, Apple 1Q shipments tumble as demand wanes in China
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Zerohedge, Apple's dominance threatened by Huawei's new smartphones
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Bloomberg, China's iPhone bans accelerate across state firms, government agencies
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Stock image and sales update, Huawei Pura-70 sells out, predicted sales of 10+ million this year
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CNBC, Huawei's chip breakthrough poses new threat to Apple, questions in Washington
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AAPL stock price chiart
finviz.com/quote.ashx?t=AAPL&p=d
First quarter global smartphone sales, by manufacturer
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