Foldable Phone Gimmickry

The Briefing By Martin Peers

Take that, Tim Cook! Huawei, a major rival to Apple in China, attempted to overshadow the iPhone 16 launch on Monday by unveiling its new foldable phone, the Mate XT, on Tuesday. This isn't just any foldable; it uniquely unfolds into three parts, unlike the two-part designs from Samsung and Motorola.

Meanwhile, Apple continues to sell its traditional one-piece models, although reports suggest a foldable iPhone could debut by 2026. Despite Huawei's ambitious offering, potential buyers might hesitate at the staggering $2,800 price tag for the Mate XT, making it one of the most expensive smartphones available (though luxury rivals like the Vertu foldable phone are even pricier).

In comparison, Apple's most costly option, the iPhone 16 Pro Max with 1TB storage, is priced at $1,600. Samsung's foldable Z Fold6 retails for $2,000, while Google's new Pixel 9 Pro Fold is $1,800. It’s likely that few consumers in China, where buying Huawei products is seen as a patriotic act, will spend on the Mate XT, particularly given the limitations imposed on Huawei by the U.S. technology ban over the past few years.

For instance, Huawei's Mate 60 phone released last year utilized a chip that performed comparably to Qualcomm's offerings from two or three years prior. Additionally, Huawei and Semiconductor Manufacturing International Corp. have struggled to produce enough chips for the anticipated Mate 70 flagship phone, facing challenges due to the reliance on outdated equipment and high defect rates in the chips produced so far.

Foldable phones remain a niche market, with IDC projecting only 25 million foldable devices among 1.23 billion smartphones expected to ship globally this year. If Apple enters this space, foldables might gain traction, but their high price tags will likely limit mainstream acceptance. Many consumers already balk at the current $1,000 price for flagship models, making it hard to envision near-$2,000 foldables becoming widely accepted anytime soon.

Ultimately, this trend could be fleeting, and the Mate XT might just represent the pinnacle of foldable phone hype.

Zaslav’s New Look
Warner Bros. Discovery stock may be struggling, but CEO David Zaslav is trying to project a hip image. A photo posted on X featuring him with Elon Musk at the U.S. Open reveals Zaslav sporting a new goatee.

Let’s hope it’s just a summer look for him. The last entertainment CEO to grow facial hair was Bob Chapek, who was ousted by the board shortly after. This weekend's New York Times piece provided an insightful look into that situation.

While we’re not implying a beard spells doom for a CEO—there are successful tech leaders with facial hair, like former Netflix CEO Reed Hastings—it might be wise for Zaslav to consider shaving the goatee given the pressures he faces.

U.S. Tech Fills Europe’s Coffers
Regulating U.S. tech companies has become a lucrative venture for European authorities. On Tuesday, the European Court of Justice ruled that Apple and Google must pay billions in back taxes and penalties.

Apple is facing a hefty bill of about 13 billion euros ($14.3 billion) in back taxes, while Google owes 2.4 billion euros ($2.6 billion) as a fine related to a previous ruling that found it favored its own comparison-shopping service over those of competitors.

Both companies have the financial means to cover these payouts. As of June 30, Apple had $153 billion in cash and investments, including $14 billion earmarked for the pending back taxes. Nevertheless, even for a company as wealthy as Apple, parting with $14 billion is no small matter.