SHENZHEN, Sept. 9 — Huawei’s latest bid to reclaim its footing in China’s premium smartphone arena landed Monday with the Mate XT2, a tri-fold device that opens twice into a tablet-sized screen. The launch pits the Shenzhen-based conglomerate directly against a wave of rivals — Xiaomi rolled out its own foldable later the same day, and Apple, under new CEO John Ternus, is expected to unveil its latest iPhone series on Wednesday, September 9, with speculation mounting that it too will be a foldable.
The Mate XT2 runs on Huawei’s new Kirin 9050 Pro chip, which the company says is designed to deliver more computing power while drawing less electricity. That efficiency matters beyond battery life: it is part of Huawei’s long-running effort to engineer around American export controls that, since 2019, have cut off its access to advanced chips and Google’s Android operating system.
Local dominance, global squeeze
Huawei’s position at home remains formidable. In the second quarter of 2026, it held 22.6% of China’s smartphone market, ahead of Apple’s 18.1%, according to consultancy IDC. Xiaomi trailed at 12.4%.
In folding phones specifically, Huawei’s grip is far tighter — it accounted for 68% of China’s shipments in Q2, per US-based research firm Smart Analytics Global. Yet the company’s financial engine is sputtering.
Huawei’s net profit for the first half of 2026 fell 36% to 23.81 billion yuan (about US$3.54 billion), accelerating from a 32% drop in the same period a year earlier. Revenue, meanwhile, rose 9.6% to 467.82 billion yuan. The consumer business division, which includes smartphones, has been the worst hit.
The cost of going it alone
Profitability is being squeezed from two directions. Research and development spending jumped 25.2% in H1 2026 to 121.38 billion yuan — equivalent to 25.9% of revenue — as Huawei poured money into AI, communications technology, smart devices and intelligent automotive solutions. At the same time, the cost of making its products rose 12.4%, outpacing revenue growth, with rising memory chip prices adding further strain.
The current crunch echoes an earlier shock. In 2021, US sanctions contributed to a 29% fall in Huawei’s annual revenue.
The company has since rebounded, posting revenue of 880.9 billion yuan in 2025 — a 2.2% rise and its second-highest annual total after a record 891 billion yuan in 2020. Huawei does not sell its products in the United States due to sanctions. In 2026, it has pushed AI-focused telecoms gear, new computing hardware and smart-driving technology, while launching new smartphones, tablets and wearables across China and overseas.
The Mate XT2, with its redesigned folding mechanism, improved water resistance, upgraded cameras and an optional privacy screen that blocks side-on viewing, is the consumer face of that strategy. The company says the device delivers 42% better overall performance than its predecessor, based on its own tests.
Whether that translates into profits — and whether Apple’s Wednesday reveal reshapes the foldable race — will be the next test for a firm standing at a crossroads between ambition and margin.
