CORRECTED-UPDATE 2-Huawei starts sales of new Pura 70 smartphone amid scrutiny on chips

(Corrects paragraph 11 to show Counterpoint expects Huawei's total shipments, not Pura 70 shipments, to hit 60 mln units this year)

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Pura 70 likely contains China-made chip like Mate 60 -analysts

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Huawei fans line up for new phone outside stores across China

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Pura 70 series has four variants and starting price of $760

By Josh Ye, David Kirton and Brenda Goh

HONG KONG/SHENZHEN/SHANGHAI, April 18 (Reuters) - C hinese technology giant Huawei started selling two models of its highly anticipated, high-end Pura 70 smartphone series on Thursday that many analysts expect to contain an advanced China-made chip like its Mate 60 handset.

The Pura series developed by the Shenzhen-based company has advanced cameras and is known for its sleek design, while the Mate series emphasises performance and business features.

The launch of Huawei's Mate 60 series last year was celebrated by Chinese state media as a triumph over U.S. sanctions on the firm, as the handsets contain an advanced China-made chip that is considered only a few generations behind cutting-edge chips used by Western tech giants like Apple and Google in terms of computing power.

Huawei teased the Pura's sale this week in a rebranding campaign renaming it from simply “P”.

The Pura 70 series has four variants: the 70, the 70 Plus, the 70 Pro and the 70 Ultra. The starting price for the Pura 70 series is 5,499 yuan ($760.06).

The Pro and Ultra versions were available to customers on Thursday, while the Plus and base versions will begin sales on April 22.

The Pro and Ultra versions were out of stock at Huawei's official online store just a minute after the sales started. Hundreds of the brand's fans have lined up at Huawei flagship stores across the country in Beijing, Shanghai and Shenzhen.

About 100 customers queuing at the flagship store in Shenzhen were handed bottles of water as they awaited their purchases when Reuters visited on Thursday. Buyers at the store in Shanghai were required to open the box and register the device at the store, possibly in an effort to prevent customers from onselling the phones at a higher price.

Huawei staff also told some of the fans in the lines that there was no guarantee they could get the device on Thursday because demand was high.

The launch of the Mate 60 Pro last August sparked a spike in Huawei's smartphone sales. According to research firm Counterpoint, in the first six weeks of 2024, Huawei saw unit sales rise by 64% year-on-year. Meanwhile, Apple's iPhone sales in China fell 24% during the same period.

Ivan Lam, a senior analyst at Counterpoint, said he expected shipments of about 60 million units from Huawei this year, with the Pura 70 series being an important catalyst. Last year, Huawei sold about 32 million smartphones.

"Initial sales are expected to be really good. There may be some shortage at various channels. But supply will be much better compared to when the Mate 60 was launched. We don't expect any longlasting shortage," he said.

Huawei’s Kirin 9000S chip was reportedly manufactured by China's Semiconductor Manufacturing International Corporation (SMIC) despite U.S. export restrictions seeking to limit Beijing's chip-making capabilities.

It was seen as a symbol of China's technological resurgence despite Washington's ongoing efforts to cripple its capacity to produce advanced semiconductors.

The Biden administration began a review of the chip earlier this year and said last month that SMIC might have violated U.S. export rules, while adding it was still evaluating the situation. Questions have surfaced about whether SMIC illegally obtained U.S. tools to make the chip. ($1 = 7.2350 Chinese yuan renminbi) (Reporting by Josh Ye in Hong Kong, David Kirton in Shenzhen and Brenda Goh in Shanghai; Additional reporting by Liam Mo in Beijing; Editing by Jacqueline Wong, Stephen Coates and Jamie Freed)