Apple's iPhone 16 faces challenge from Huawei's $3,650 tri-fold phone

BEIJING — Apple's new iPhone 16 failed to excite investors with long-expected AI features still in test mode even as an industry-first tri-fold phone from Huawei raised the stakes in a battle to dominate the global smartphone market.

Apple's shares fell one per cent in pre-market trading on Sept 10, a day after the US tech giant unveiled its new iPhones that sport hardware-level integration for applications based on artificial intelligence but with limited changes to the external design.

The phones will use AI features dubbed Apple Intelligence to improve the company's voice assistant Siri, as well as enhance the camera.

These AI features will arrive on iPhones in beta in October. The company did not say when it would move beyond that.

"With lots of words like 'later this year' and 'early next year', the core Apple message for iPhone 16 was: Next year will be better," Needham analyst Laura Martin said in a note.

On Sept 10, Huawei showed off its new Mate XT, which users can fold three ways. The device has already received more than four million pre-orders, for which no deposit is required, according to the company's website.

It boasts an AI assistant with text summary, translation and editing functions, as well as AI-boosted image-editing functions such as trimming unwanted parts of photos.

But with a price tag that starts at US$2,800 (S$3653.30) — more than twice the starting price of the comparable iPhone 16 Pro Max — and limited production, the tri-fold phone is likely to become more of a symbol of Huawei's tech prowess than a major sales driver, analysts said.

"Production constraints and the high price point mean the new phone will likely not have a huge impact in terms of shipments," said Will Wong, a senior researcher at consultancy IDC.

"But it's telling the consumers that it's still the tech leader and the potential challenge it brings to Apple may be far beyond just market share."

Both the Mate XT and iPhone 16 go on sale on Sept 20.

Apple's AI challenge

Huawei's launch, which follows a series of successful smartphone debuts, underscores the company's ability to navigate US sanctions and solidifies its position against Apple in China, where some consumers criticised the new iPhone 16 for its lack of AI features in the country.

Apple has yet to announce an AI partner in China to power the 16s, and Apple Intelligence, the company's AI software, will be available in Chinese only in 2025.

"What's the point of buying it if you can't use AI?" wrote one user on Weibo, China's X-like platform.

Another commented: "Without AI as the biggest selling point, it should be half-price."

While Apple for years enjoyed strong demand in China, where new iPhone launches once sparked a frenzy, its sales have dwindled and the company's ranking in the world's second-largest economy has now dropped from third to sixth place.

Huawei made a comeback to the high-end smartphone segment in 2023 with the release of a device powered by a domestically made chip, defying US sanctions that have cut off its access to the global chipset supply chain.

The launch of the Mate 60 Pro surprised analysts and US officials.

Huawei already has two-way foldable phones in its lineup, and its strong sales in China helped it overtake Samsung Electronics in 2024 as the biggest vendor of such phones globally.

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