Mate XT Extraordinary Master starts at a staggering price of 19,999 yuan and will officially go on sale on September 20th.

A new frenzy is about to begin – Huawei's luxury smartphone strategy kicks off, with dealers coordinating and scalpers driving up the prices.

On September 10th, Huawei unveiled a new triple-folding screen smartphone – the Mate XT Extraordinary Master.

Compared to the folding screen phones already launched by major Chinese smartphone brands, the Mate XT Extraordinary Master has an additional screen and is positioned as an "ultra-high-end smartphone" with a starting price of 19,999 yuan, earning it the nickname "Electronic Maotai."

On September 7th at noon, without any price or configuration details disclosed, pre-orders for the Mate XT Extraordinary Master began on Huawei's official website.

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Two days later, online pre-orders exceeded 3 million.

After the official price was announced on September 10th, pre-orders reached 4 million.

By the time of this writing, pre-order numbers have surpassed 4.108 million and continue to grow rapidly.

The Chinese smartphone market has long entered a saturated, red ocean market.

Given the current market capacity, a pre-order volume of 4 million is quite astonishing.

According to data provided by research firm Counterpoint, this figure is already approaching 25% of the global folding screen smartphone shipments in 2023, close to the total shipments of folding screen smartphones in the Chinese market in the first half of 2024.

In other words, it is highly unlikely that this phone will sell 4 million units in a short period of time based on common sense.

However, from another perspective, the current popularity of the Mate XT Extraordinary Master seems to have its rationality.

In September last year, after Huawei launched the Mate 60 smartphone with its own chips for pre-sale, all e-commerce platforms sold out within tens of seconds.

The premium version once exceeded a thousand yuan in markup, and some scalpers who hoarded the product made a fortune.

Since then, Huawei's new phones have been called "Electronic Maotai," referring to a product that is suitable for reselling, with high markup and liquidity in the secondary market as a "hard currency."

How does a smartphone with a shocking price sell like hotcakes during pre-orders?

Who is buying the Huawei Mate XT Extraordinary Master?

Through feedback from several channel insiders, we found that this round of 4 million people's rush to buy is not a simple scalper's carnival.

The reasons for this phenomenon are related to Huawei's mobile phone layout.

Professional scalpers are an important driving force, but they are not the ones who have the opportunity to swallow the most profits.

The crazy rush for the September 7th Shenzhen is still extremely hot, and in a Huawei flagship store in Nanshan, consumers who came to pre-order the triple-folding screen phone have already formed a long queue, blocking the entire floor.

The store clerks, with almost no space to stand, are busy guiding and afraid that consumers will queue for too long, distributing mineral water to them.

An afternoon passed, and the girl in line finally happily received a successful reservation ticket, but the happiness was fleeting.

The staff told her that the reservation is a registration of intention, and whether she can buy it or not depends on the result of the lottery.

If she is drawn, she will be notified to come to the store to pay.

On September 10th, before the Huawei press conference, Huawei's Shenzhen MixC World Store was filled with consumers who came to the famous place.

Photo source: Gu Lingyu/Photo On September 9th, when we came to the store again, we were told that offline reservations have ended, and subsequent purchases still need to wait patiently.

At this time, the number of online reservations has approached 3 million.

On the second-hand trading platform Xianyu, a large number of transfer reservation order transaction pages began to appear, with each Mate XT priced at 30,000-90,000 yuan, and the premium set by the merchants is at least 10,000 yuan, with a deposit of 5,000 yuan.

Through communication with these merchants, we found that although everyone is silent about the source channel, observing their past sales history can be divided into three categories: one is the terminal scalper, mainly reselling various terminal products, the source may come from dealers; one is the industry chain scalper, usually has a past of mobile phone and parts OEM experience, the source may come from the original factory or supply chain; the other is a pure layman, such as claiming to have multiple Huawei mall accounts, can be on behalf of the bid, on behalf of the grab.

However, these merchants have one thing in common: they are all retail scalpers.

In other words, they sell a small number of orders, the source is not stable, and they cannot guarantee delivery.

After Huawei announced the new product price, the new machine's selling price on the second-hand platform generally came to 40,000-50,000 yuan.

Photo source: Network products are more scarce than any previous rush, which is the biggest feature of this Huawei triple-folding screen new machine Mate XT Extraordinary Master rush.

Generally speaking, a product wants to obtain high markup ability in the secondary market like a big star's concert ticket, it must have two prerequisites: high scarcity and high liquidity.

Such as the two biggest reasons for the rush to buy Mate 60 last year, one is that after Huawei's mobile phone business was sanctioned, loyal users have not changed their phones for many years, the market user base is large, and there is a high possibility of liquidity; the other is that Mate 60 uses its own chips and the early stock is insufficient, which is a high scarcity product.

The scarcity and liquidity of this Mate XT Extraordinary Master are not inferior to Mate 60.

Under the current technology, the technical difficulty of triple-folding screen mobile phones is high.

First, triple-folding screen mobile phones need to use special screen materials, which should not only maintain the visual and sensitivity of the screen but also have good folding durability; in addition, the hinge design of triple-folding screen mobile phones is more complex, and the mass production yield is difficult to ensure; moreover, as the number of folding increases, the difficulty of reducing the crease also increases accordingly.

At the same time, with the increase of screen area, the requirements for battery life and weight reduction are also higher, and the overall manufacturing process difficulty is increased.

Therefore, the cost and technical difficulty of triple-folding screen mobile phones are far higher than ordinary mobile phones.

So far, although many brands have shown the prototype of triple-folding screen mobile phones, Huawei has taken the lead in mass production.

Therefore, having a Huawei Mate XT Extraordinary Master that no one else has is actually a "symbol of identity."

The first round of Mate XT Extraordinary Master is not much.

Some media cited supply chain news that this round of channel first round of stock is not more than 40,000 units.

A Huawei dealer told us that there are about 50 Huawei smart life stores and authorized experience stores in his city, and only about less than 8 stores have received the first batch of supplies.

Huawei usually opens an internal purchase channel for employees.

However, in the short term, the internal purchase channel is temporarily not available.

A middle-level of Huawei's research and development line told us that he also wants to buy a triple-folding screen new machine, but he and his colleagues have no internal channels.

Another middle-level responsible for ecological expansion of Huawei said that the internal only provides a preferential purchase code for some key positions of leaders, so that these external positions of leaders can buy for maintaining customer relations, the price can not be cheap, can only say to ensure faster access.

Therefore, the seemingly abnormal rush to buy Mate XT Extraordinary Master is actually normal - because the new machine is scarce and highly liquid, it has a high markup ability in the early stage of listing.

"It's like buying a financial product with a good return rate."

A user who has never used Huawei's product also booked a Huawei new machine, he said that many colleagues and friends who have booked around him are like him, not interested in the actual product, just holding a financial and trial mentality.

However, among these 4 million bookers, most people also can not get the first round of new machines.

Since the current rush to buy is not a real demand, as time goes on, will this bubble burst?

Will there be a situation where the product is stuck in the hands of scalpers, or even can't be sold at a discount?

The answer is no.

As long as the gap between supply and demand is large enough, there is almost no risk for resellers.

The mass production technology of triple-folding screen new machines is immature, the cost is high and the market is small, which is destined to have a small output, but under this situation, Huawei chooses to open a no deposit booking.

A senior Huawei dealer told us that this is a marketing strategy.

"The booking threshold is low, and the heat is pulled up.

As long as the heat is up, the demand is expanded, and as long as there is demand, the channel has room for price increase."

We understand that in order to be able to make the Mate XT Extraordinary Master heat higher, even if their own store has supply, this dealer and the clerks all booked online.

His reason is very simple: Huawei chooses a narrow channel high markup strategy, which is actually a disguised reward and subsidy for dealers.

The industry often observes the supply situation of a mobile phone to evaluate its market performance.

If a mobile phone is out of stock, it is usually interpreted as having a higher profit margin for the model.

The strong markup ability of the product is one of the important reasons for dealers to follow Huawei.

Before the return of Huawei's mobile phone business, dealers once faced a shortage of goods to sell.

Before the launch of the Mate 60 series, Huawei laid out the channel in advance, encouraged dealers to expand stores against the trend in the trough, provided a foundation for the Mate 60 series to quickly occupy the market, and also allowed dealers who had been waiting for a long time to quickly recover.

However, with the decline of the momentum of Mate 60, coupled with insufficient product supply, sales began to decline in the first quarter of 2024.

Subsequently, the sales of Huawei's Pocket 2 and Pura 70 also failed to meet expectations, highlighting the contradiction that the speed of channel development exceeds the speed of products.

At the same time, the upward exploration of Huawei's product prices has also brought sales pressure to the stores.

For stores, a high markup product of a hit not only means profit space, but also helps to enhance the brand image, to offset the adverse effects of the weak market.The aforementioned dealer stated that Huawei has conducted strict screening of its distribution channels.

In order to align with the product's positioning, the stores that truly have the opportunity to sell the Mate XT Extraordinary Master must be high-end stores, and there cannot be many of them.

At this stage, due to the pressure on dealers, Huawei has not required them to engage in the common practice of "bundling" (dealers sell products that are not easy to sell in order to have the opportunity to obtain the manufacturer's best-selling products).

However, he believes that once the market picks up, it is only a matter of time before dealers are required to sell "bundled" products.

The "Extraordinary Master" series targets the ultra-high-end narrow channels, with limited supply and relentless marketing efforts.

Various signs indicate that Huawei is still "testing the waters" in the somewhat unfamiliar ultra-high-end market.

In September last year, Huawei launched a new ultra-high-end brand called "Extraordinary Master".

The first batch of products included the Mate 60 RS Extraordinary Master smartphone, starting at a price of 11,999 yuan, and the HUAWEI WATCH ULTIMATE DESIGN Extraordinary Master watch, made of 18K gold, priced at 21,999 yuan.

The Huawei Mate XT Extraordinary Master is its second smartphone.

Ethan Qi, Deputy Director of Research at Counterpoint, believes that the launch of the Mate XT Extraordinary Master can consolidate Huawei's technological leadership in the field of folding screens.

To some extent, this is the right strategy because the process will help Huawei accumulate experience in developing more complex folding smartphones.

As folding screen technology becomes more mature and consumers become more receptive to folding phones, Huawei's decision to launch a new product with more acceptable weight, thickness, and reliability at this time is wise.

In terms of mobile phone layout, Huawei's two most important product series are the Mate series released every autumn and the Pura series released every spring.

The former is aimed at business people, while the latter emphasizes photography functions and targets a younger market.

The starting price of the new models of both product series is over 5,000 yuan.

According to our understanding, the release time of Mate 70 this year has been postponed, but the starting price may continue to rise.

Huawei's channel layout is also in line with the ultra-high-end strategy.

Dealer information shows that Huawei is accelerating the investment in "luxury stores", with high requirements for store location, operation, personnel management, and products sold.

The aforementioned interviewed dealer told us that these "luxury stores" should "be next to luxury brands like LV, and have the temperament of luxury goods".

At the same time, for ordinary stores, Huawei has also upgraded from emphasizing the sales ability of the stores to cultivating the service ability of the store sales, trying to transform the stores from simply selling products to managing customers, and improving customer stickiness and brand positioning.

Looking at the law of product iteration and evolution, folding screen phones are most likely to become the weapon for Huawei to break through in the ultra-high-end market.

According to data from market research institution IDC, in China's folding screen phone market, Huawei ranked first in the second quarter of 2024 with a market share of 41.7%, followed by vivo and Glory with market shares of 23.1% and 20.9% respectively, OPPO ranked fourth with a market share of 8.4%, and Samsung ranked fifth with a market share of 3.0%.

However, looking at the overall market, Huawei's advantage is not obvious.

IDC data shows that in the first quarter of 2024, Glory ranked first with a market share of 17.1%, Huawei ranked second with a market share of 17.0%, and OPPO, Apple, and vivo ranked third to fifth respectively.

In the second quarter, vivo ranked first in China's smartphone market with a market share of 18.5%, a year-on-year increase of 17.1%.

Huawei followed closely with a market share of 18.1%, ranking second, with a year-on-year increase of more than 50%.

OPPO ranked in the top three of the market with a market share of 15.7%, while Glory and Xiaomi ranked fourth and fifth with market shares of 14.5% and 14% respectively.

In the fiercely competitive red ocean of China's mobile phone market, the industry characteristic of "he who gets the high-end market gets the world" has not changed, but this market has started to show new variables due to Huawei's return.

On September 10th, Apple also released the iPhone 16 series of new products, but the past situation of selling at a premium and being hard to find did not appear again.

On the second-hand trading platform, a merchant with an Apple logo on his avatar is trying to promote his new business, "Huawei die-hard fans, (official price of the phone) add 10,000 yuan and directly send it to your home by SF Express."