Apple’s iPhone 16 Faces Lukewarm Reception as Huawei’s Tri-Fold Phone Raises the Bar

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Apple’s latest iPhone 16, while integrating long-anticipated artificial intelligence (AI) features, has failed to generate significant excitement among investors. The release comes at a time when Chinese tech giant Huawei unveiled an industry-first tri-fold phone, raising the stakes in the ongoing competition for dominance in the global smartphone market.

Apple’s shares dropped by 1.7% following the unveiling of the new iPhones. Although the devices feature hardware-level AI capabilities—dubbed Apple Intelligence—these enhancements remain in the testing phase. Key AI-powered features, such as improvements to Siri and enhanced camera functionality, are expected to arrive in beta form in the coming months. However, these features may not be available immediately, causing many consumers to delay upgrading.

Despite the AI integration being one of the most anticipated upgrades, Apple did not provide a specific timeline for when these features would be fully rolled out. According to analysts like Laura Martin from Needham, Apple’s core message appeared to focus on future improvements, leaving many to feel that the real excitement around the iPhone 16 may come “next year.”

Moreover, Apple has yet to announce a partnership in China, where strict government regulations require generative AI chatbots to undergo vetting before public release. This has further dampened enthusiasm for the iPhone 16 in the Chinese market, one of Apple’s largest.

On Chinese social media platform Weibo, the hashtag “iPhone 16 Chinese version doesn’t support AI yet” quickly garnered over 11 million views. Many users expressed frustration over the lack of AI integration, with some suggesting that the phone should be sold at a lower price without this key feature.

One notable strategy in Apple’s iPhone 16 launch was its decision not to raise prices, which analysts saw as a prudent move. Consumers are increasingly hesitant to spend on high-ticket items, and Apple’s restrained pricing reflects these economic realities. In stark contrast, Huawei’s newly revealed Mate XT tri-fold phone has been priced at a hefty $2,800. While this may limit its overall shipments due to production constraints, it sends a strong message that Huawei remains a leading innovator in smartphone technology.

Huawei’s Mate XT, which boasts features like AI-enhanced text summarization, translation, editing, and image manipulation, received more than 4 million pre-orders shortly after its announcement. These pre-orders highlight Huawei’s successful navigation of U.S. sanctions, which had previously cut off its access to critical global chipset supplies. The company’s resurgence, particularly with the Mate 60 Pro, has reestablished its foothold in the high-end smartphone market.

Meanwhile, Apple’s market share in China has been slipping. Once a leader in the world’s second-largest economy, Apple’s iPhone shipments in China fell by 6.7% in the second quarter of 2024, according to Canalys. Apple has now dropped from third to sixth place in terms of market ranking in China, a sharp decline after years of strong growth.

Both the iPhone 16 and Huawei Mate XT are set to officially go on sale soon, with consumers and analysts alike watching closely. While Huawei’s new tri-fold phone may not see significant initial sales due to its high price, its technological innovations are a clear signal to Apple and other competitors.

Industry experts, such as Will Wong, a senior researcher at IDC, believe Huawei is positioning itself as a tech leader rather than focusing solely on market share. Huawei’s recent string of launches proves it has the capability to challenge Apple’s dominance, especially in key markets like China.

As Apple faces slowing sales in critical regions and a growing challenge from Huawei, the smartphone battle appears to be shifting. The iPhone 16, while a step forward, may not be enough to secure Apple’s position in the increasingly competitive global landscape.