Apple Mocked By Huawei As It Takes On IPhone X With Mate 10

Apple Inc’s (NASDAQ:AAPL) little snafu on stage while demonstrating the new facial recognition feature for its mega edition, iPhone X not only resulted in a wave of trolls and memes on social media but also gave competitors an opportunity to take potshots at the tech giant.

Per reports, in a Facebook (NASDAQ:FB) ad post, Huawei took jabs (using a clown) at iPhone X’s facial recognition by stating it fails often and people should wait for the real artificial intelligence (AI) phone coming on Oct 16, 2017. This refers to its upcoming device, Mate 10.

During Apple’s mega event on Sep 12, 2017, the company suffered a major embarrassment when the phone Craig Federighi was using to demonstrate the Face ID feature did not unlock and the software chief was forced to use the backup, which worked as it was required.

Apple later on clarified that the snafu was caused by members who initiated a "lockout mechanism". Per a Yahoo (NASDAQ:AABA) report, a staff member restarted the phone just before the event and so when Federighi was attempting to unlock, it showed the “password is required” prompt. Now, if the phone is switched off or has been restarted, the password needs to be manually set as a security measure.

Nonetheless, the social media has been merciless. Huawei now joins the list.

We can’t overlook the fact that of late Apple is losing ground (especially in China and South East Asia) to cheaper handsets. Chinese handset makers like Oppo, Vivo, Xiaomi and Huawei have been gaining market share.

Per a CounterPoint Research, the smartphone market in China grew 3% between April and June 2017. Huawei, Oppo, Vivo, and Xiaomi have been dominating majority of the market. Huawei indeed was the biggest gainer with its new models like Nova and P10 models. Notably, Huawei tried entering the U.S. market but hasn’t had much success.

The latest CounterPoint Research report (Sep 2017) pointed that Huawei outshined Apple to become the second largest brand overall. Despite market loss, Samsung (KS:005930) is still the leading brand while Apple was third, behind Huawei.

As for Huawei, China is the biggest market followed by Europe, Latin America, and the Middle East. Its limited presence in other South East Asian markets along with U.S "limits Huawei's potential to the near-to-mid-term to take a sustainable second place position behind Samsung” added the report.

As far as Apple is concerned, it needs to have a hit with iPhone X, the much anticipated tenth anniversary mega edition. The phone definitely marks a giant leap with features like OLED display and glass body and Face ID. However these features aren’t exclusive and Samsung phones already boast these. Plus, the hefty price tag ($1,000) has caused a raging debate.

Though users in the United States are expected to be unaffected by the price point, sales in China are expected to take a hit as the price tag is double the averageChinese monthly salary. China is Apple’s biggest market after U.S and Europe.

Zacks Rank and Share Price Movement

Apple carries a Zacks Rank #3 (Hold).

Notably, the company has outperformed the industry in the past year. Shares of Apple have surged 39.7% compared with the industry’s 38.8% increase.

Stocks to Consider

Better-ranked stocks in the broader technology sector include Activision Blizzard (NASDAQ:ATVI) and FormFactorInc (NASDAQ:FORM) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Activision and FormFactor is currently projected to be 13.6% and 16%, respectively.

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