Why Huawei’s New Phone Costs Two Thousand Pounds

Does this sound familiar? You look at two similar products in a store, one of them costs £3, while the other one costs £1.50. You decide to pick up the more expensive one. After all, doesn’t higher price means better quality?

This strategy of premium pricing – sometimes called prestige pricing – has been common in the smartphone industry for a long time. When Apple first announced the iPhone, it deliberately priced it at the highest end of the market to signal it was the most cutting-edge, innovative, amazing phone on the market. For the last ten years, Apple has had a monopoly on the prestige mobile phone. However, with the new foldable Mate X, Huawei’s latest smartphone to enter the market, the Chinese firm is challenging Apple’s right to be the sole premium smartphone. Read on for how Huawei is hoping to challenge the world’s biggest tech company – and why their two thousand pound phone might just be a groundbreaking shift in the market.

Innovation written on a whiteboard

Who are Huawei?

Huawei stall in the centre of Mobile World Congress

For many, Huawei might be an unknown Chinese brand, but they are one of the world’s biggest smartphone manufacturers. With a considerable presence in China, and dominant in many tech industries, Huawei has spent the last decade slowly growing market share and in 2018 overtook Apple in terms of smartphones sold per year.

However, despite selling more smartphones than Apple, their margins are much, much tighter (just like almost all other smartphone manufacturers). As a result, their profit-per-unit simply does not match up with Apple. Tim Cook’s ability to prestige price Apple products and charge more than anyone else on the market means the company’s profit margins are astronomical.

Huawei, like many other companies, have been jealously eyeing up the premium smartphone market. However, there simply hasn’t been anything they could do to break in and beat Apple. The world saw the iPhone as the most technologically innovative smartphone, and others simply could not compete.

That all has changed though with the invention of the foldable smartphone: Apple has not introduced anything like it to the market yet (though there are rumours that might change). Huawei saw an opportunity to steal a march by bringing to market a foldable phone before Apple, and positioning it as a premium product that early technology adopters will love. By pricing said foldable smartphone – the Huawei Mate X – at £2,000, Huawei have been able to present themselves as the ‘next big thing’ in smartphone innovation. In other words, Huawei have told Apple that there’s a new kid in town looking for a piece of the premium smartphone market.

 

What is the Huawei Mate X?

Huawei office building

The Huawei Mate X is the foldable smartphone announced by the Chinese firm to shake up the market. Supporting the newest 5G technology and using a ‘Falcon Wing Mechanical Hinge’, the device can switch between a 6.6-inch smartphone to a larger 8-inch tablet. The screen is on the outside of the phone, unlike Samsung’s cheaper Galaxy Fold, which means it does not suffer much strain when folded and has an extensive product life. However, that does mean the screen is likely more liable to scratching and folding – a mobile phone screen protector will be handy for the device.

The main reason to get this newest phone is the prestige factor. If you want to be one of the people on the cutting edge of smartphone innovation, then the Huawei Mate X is right for you. The phone’s backend is utterly spectacular – it comes with 5G support, a flexible OLED display, and the insanely powerful Kirin 980 seven-nanometre chip with built-in artificial intelligence. However, to be among the first owners of a flexible, foldable smartphone is an accolade tech lovers cannot afford to miss.

 

Is the Huawei Worth the Price?

Apple logo

The most important questions for consumers, however, is whether the smartphone is worth the gigantic £2000 price tag attached to the device. As amazing as the phone will be, there’s no getting around the fact that it is more than £500 more expensive than the 512GB iPhone XS Max – the most costly mainstream phone on the market.

Part of the reason, as already mentioned, is prestige pricing: by being ‘the most expensive (mainstream) phone on the market’, Huawei implicitly has the legitimacy to its claim to sell the best phone on the market. The Harvard Business Review wrote in 2017 about how Apple’s four-digit pricing gave legitimacy to its claim to still be the best a phone user can get. Huawei is looking to take advantage of the same psychological intuition. And clearly, Apple’s price strategy worked.

Whether you think Huawei offers enough to justify its hefty price tag depends on how much of a techie you are. If you just want a good smartphone that does the basics, you might have to wait a few years before a cheap enough foldable smartphone enters the market. However, if you want to own one of the best smartphones on the market and invest in some mobile phone history, then the Huawei Mate X will be a wonderful phone for you. Either way, we will keep a close eye on Huawei’s premium pricing strategy and see if it pays off in the coming months.

 

As smartphone screen experts, one thing we know for sure is that the newest foldable smartphones will likely be more prone to damage than any eve released on the market. The Huawei Mate X, in particular, has its screen on the outside of the phone, meaning it risks being scratched in your pocket by keys or anything else. If you want to protect your phone from damage, take a look at our anti-glare screens or other mobile phone screen protectors to find a product that will suit your needs.

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