Huawei mobile device count nears 1 billion as Apple rivalry intensifies

(Bloomberg) — Huawei Technologies Co. is approaching one billion active consumer devices, underscoring how the U.S.-sanctioned company is taking on Apple Inc. (AAPL) in the key Chinese market.

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About 900 million Huawei gadgets now have Harmony’s internal operating software installed, a significant increase from just a few months ago, consumer business president Richard Yu said. Huawei’s premium smartphone sales rose 72% in the first five months of 2024, it told participants at its annual developer forum on Friday.

These numbers illustrate the phenomenal growth of Huawei phones since the announcement of the Mate 60 Pro, which featured a 7-nanometer processor that Washington officials didn’t think Chinese companies could develop. Business has been booming since then, helping Huawei to more than fivefold profit in the March quarter and taking market share from Apple and Chinese rivals.

“No one can extinguish the light of the stars in the sky. Today, the future of HarmonyOS is set,” Yu told his audience. “Let us enjoy the wonderful galaxy that is ours.”

Huawei aims to release a successor to its flagship smartphone, the Mate 70, at the end of the year, Yu said. It will likely run on HarmonyOS Next, which will sever remaining ties to Google’s Android. Huawei plans to release a beta version to consumers around August, Yu said.

In recent years, Huawei has taken HarmonyOS beyond smartphones and into products ranging from watches to TVs. The Chinese company sold about 11 million wearable devices in the first quarter, surpassing Samsung Electronics Co., according to IDC. According to Counterpoint Research, this helped Harmony OS overtake Apple’s iOS in the Chinese market between January and March. However, the main factor remains the growing popularity of Huawei phones, Counterpoint added.

Huawei is becoming more aggressive in trying to capitalize on HarmonyOS as its user base grows. It is considering limiting in-app purchases, underscoring its growing confidence in competing with the iPhone – although there will likely be at least one notable exception – Tencent Holdings Ltd.’s WeChat.

It is also making strides on the artificial intelligence front with its Ascend graphics processor, part of a growing portfolio of chips that has prompted Nvidia Corp. Chief Executive Jensen Huang to call Huawei a formidable rival.

Chinese companies, including Huawei, are developing local alternatives to the most powerful artificial intelligence accelerators, such as Nvidia, which Washington has banned from entering the country. These efforts are seen as key to Beijing’s broader ambitions to catch up with the U.S. in artificial intelligence and chipmaking.

On Friday, Yu said its Ascend processors are 1.1 times more effective at training artificial intelligence models compared to mainstream products, although he did not name specific companies. His company has so far established three AI data centers in China equipped with Ascend chips, helping local companies develop and provide AI services.