Chinese giants Xiaomi, Huawei race to get ahead of Apple’s rumored foldable iPhone

Huawei and Xiaomi launched new foldable smartphones ahead of Apple's rumored first foldable iPhone unveiling, intensifying competition in the premium handset segment. Counterpoint estimates Apple could ship 6 million foldable iPhones this year for a 25% global market share, rising to 40% by 2027, supported by pent-up demand among Apple users. Huawei retains more than two-thirds of China's foldable market, while both Huawei and Xiaomi highlighted proprietary chip technologies in their new devices.

Analysis

The investable question is not unit share in foldables but whether a new form factor restarts Apple’s replacement cycle and raises iPhone mix. A successful premium launch would support FY27 iPhone ASPs, services attachment, and gross-margin resilience even if initial volumes are supply constrained; the key sensitivity is China, where a differentiated hardware refresh could slow share leakage and improve channel sell-through. The near-term stock response is likely governed by availability, durability claims, battery life, and pricing rather than headline demand estimates.

Huawei’s response is more consequential for Apple than Xiaomi’s: its entrenched premium distribution, local ecosystem advantages, and domestic-sourcing narrative make China the principal risk to any foldable-led upgrade thesis. Conversely, a credible Apple entry could pressure Samsung’s foldable economics by shifting the category from Android-led experimentation toward carrier-supported premium upgrades, while lifting demand for foldable OLED, hinges, and ultra-thin glass suppliers. The Chinese vendors’ chip claims should not be capitalized without independent evidence on yield, power efficiency, modem performance, and scalable manufacturing capacity.

Consensus may overstate immediate cannibalization of Apple’s installed base: a high-priced foldable can initially be margin accretive if it pulls upgrades from Pro buyers rather than displacing lower-end iPhones. The bearish alternative is that the device exposes an unfavorable durability/repair-cost tradeoff, creating elevated returns and warranty reserves; that would cap mix benefits within one to two quarters. Falsification for the constructive view is weak China channel commentary, launch lead times that do not extend, or management guidance implying foldable supply limits persist beyond the first product cycle.

Key Decisions for Investors

• Maintain a tactical long AAPL into and through the event only if pricing and availability indicate a genuinely premium, scalable SKU; reassess after initial preorder lead-time data over the following 7-14 days. Risk/reward is favorable only if the market is not already pricing a material FY27 ASP uplift; exit on weak China-specific channel indicators or a durability/repair narrative.
• Use a 1-3 month relative-value expression: long AAPL / short SSNLF (Samsung Electronics) in equal beta-adjusted notional, conditional on Apple demonstrating differentiated industrial design and carrier support. The thesis is multiple and premium-category share pressure on Samsung rather than an immediate collapse in its foldable volumes; stop out if Apple’s launch is delayed, supply constrained, or materially under-specifies Samsung on display and battery performance.
• Do not chase Chinese handset beneficiaries on proprietary-chip marketing alone. Create an alert around independent teardown evidence, foundry disclosure, and shipment scale; absent proof of competitive yields and power efficiency, these claims are more likely to influence domestic sentiment than near-term earnings.
• For investors seeking defined event risk, prefer AAPL call spreads expiring 1-3 months after launch rather than outright calls, with strikes selected around the pre-event implied move. The upside requires evidence of demand beyond early adopters; the primary downside is a technically impressive product whose price or supply availability limits earnings relevance.