Like other tech companies using Google’s Android, Huawei joined the run for making foldable devices early to compete with Samsung. The company’s first commercially viable phone was Mate X which costs a whopping US$2,400(~Ksh 254,400, based on current rates) – an expensive premium for enthusiasts ready to pay the price for emerging technology.
So far, the company has already lost between US$60 million and US$70 million, said Richard Yu, head of Huawei’s consumer business, in an interview with one Chinese media outlet.
Pioneering is Damn Expensive
Developing a new product is expensive. It often requires huge upfront investments channelled into research and development. Once products are ready for mass production, another setback kicks in: manufacturing yields – the ratio of non-defective products to all manufactured products – which partly affects the profitability.
Currently, the company’s yield seems low, according to Yu’s statement to the media outlet.
“In the future, the yield will increase and the scale can turn the loss into a profit,” Yu said, in an interview (Translated from Chinese directly using Google Translate).
There’s a whole lot of work going from the R&D level to the final point of production which often translates to significant costs per unit, until later when “economy of scale” comes into play.
All of that said, the company seems relentlessly investing in foldables – an evidently expensive exploration for now.
Around two months ago, the company released a more polished successor to their original Mate X foldable phone dubbed Mate Xs. The Mate Xs, lunched in the Chinese market in February retailing at a similar price to the Mate X.