An attendee holds the Huawei Technologies Co. P20 Porsche Design smartphone during the company’s unveiling event in Paris, France. (Photographer: Marlene Awaad/Bloomberg)

Huawei Unveils iPhone X Challenger as U.S. Criticism Piles Up

(Bloomberg) -- Huawei Technologies Co. introduced its challenger to Apple Inc.’s iPhone X and Samsung Electronics Co.’s Galaxy S9, amid the company’s fallout with U.S. retailers, wireless carriers and government officials.

The 5.8-inch P20 smartphone features an edge-to-edge display, and a 6.1-inch Pro model also has three camera lenses on the back: one for color, one for black-and-white shots and one designed for close-ups. The screens of both versions feature a "notch" at the top similar to that seen on the iPhone X but avoided in Samsung’s latest designs.

Huawei sold the third most smartphones globally last year with 11 percent of the market, trailing Samsung’s 22 percent and Apple’s 15 percent, according to data from IDC. Huawei is also the only one of the top three players to consistently gain market share year-over-year since 2014, according to IDC.

But no matter the P20’s competitive potential, officials in charge of the NSA, FBI, and CIA, have all recommended that U.S. citizens don’t use Huawei devices. AT&T Inc. and Verizon Communications Inc. -- the top two U.S. phone carriers -- have also decided to not sell the company’s products following government concern. As most phones in the U.S. are bought via carriers, the move puts China’s top phone maker at an innate disadvantage.

Still, Huawei has been able to sell phones in the U.S. through direct sales channels such as Amazon. But that too may be short lived: Best Buy Co., the largest electronics chain in the U.S., has severed ties with the company and plans to stop selling all of its products in the coming weeks. Huawei doesn’t currently plan to sell the new model via its remaining U.S. channels either.

That leaves only Amazon and Walmart to handle online and brick-and-mortar sales respectively, said Jia Mo, a Canalys analyst based in Shanghai. "Both channels are mainly responsible for sales of affordable devices and that doesn’t help improve Huawei’s brand image," he said.

Earlier this week, Huawei got more bad news when Federal Communications Commission Chairman Ajit Pai proposed a ban on allowing U.S. wireless carriers to use government subsidies toward telecom equipment from China-based manufacturers such as Huawei.

The U.S. ban is unlikely to have an immediate impact on Huawei’s business as its growth in the region has been close to flat while it "has gained share year-in and year-out on a global basis," said John Butler, an analyst for Bloomberg Intelligence.

©2018 Bloomberg L.P.

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