Huawei could overtake Apple this year in smartphones, top analyst says

Chris Ratcliffe | Bloomberg | Getty Images

Richard Yu, chief executive officer of Huawei’s consumer business group, speaking during the launch of P10 & P10 Plus smartphones and Huawei Watch 2 smartwatch, ahead of the Mobile World Congress (MWC) in Barcelona, Spain, on Sunday, Feb. 26, 2017.

The Kirin 970 is the size of a thumbnail and supports on-device AI. That means the AI functions are processed on the smartphone rather than in the cloud, which could speed up processes. If Huawei can prove that its AI chipset has boosted its smartphone’s capabilities, it could allow the Chinese firm to push prices higher and become number one in the market.

“This will give them (Huawei) an edge competing with other players because there are not many players that are able to launch their own AI chipsets. We think about Apple, Samsung, and Google have their own. All other vendors will have to rely on someone else,” Jeronimo told CNBC.

“If Huawei didn’t have this capability, they will be a few steps behind Apple and Samsung in a couple years. It’s crucial for them to lead. If the experience is better compared to Samsung or an iPhone, then it will give them an advantage in the long term.”

The company is holding an event on Monday in Munich, Germany, where it is expected to unveil new devices.

Huawei’s ambitions appear to be ahead of schedule. In an interview with CNBC in February 2016, Richard Yu, the CEO of Huawei’s consumer business group, said he hoped the company would be number two in the smartphone market within three years, and number one within five years.

Still, Huawei trails the likes of Samsung and Apple in terms of both profits and revenues in the smartphone market. Sales in Huawei’s consumer business group, the majority of which comes from smartphones, hit 105.4 billion yuan ($16 billion) in the first half of 2017. In comparison, Apple saw iPhone revenue come in at $58 billion, while Samsung’s mobile sales were $45.6 billion in the same period.

Apple and Samsung also collectively account for around 94 percent of profits made in the smartphone market in 2016, according to data from market research firm Strategy Analytics.