PYMNTS Intelligence Banner June 2024

China’s Huawei Mulls In-App Purchase Fees as it Challenges Apple

Huawei

Chinese smartphone-maker Huawei is reportedly considering levying in-app purchase fees on its operating system.

That’s according to a report Tuesday (June 18) by Bloomberg News, which dubbed this as a sign of the company’s rising confidence as it takes on Apple in the world’s biggest smartphone market.

Sources familiar with the matter told Bloomberg that Huawei is considering a commission that would be lower than the standard 30% charged by Apple and Google for payments on their mobile stores. Up until now, Huawei has kept its Harmony operating system free of fees as a way to woo developers and publishers.

These sources say Huawei has been discussing a 20% fee for games, which make up the bulk of its app store revenue. That fee, the report said, is considerably lower than the 50% charged by rival Android store operators in China.

A spokesperson for Huawei told Bloomberg it is not true that the company is discussing a 20% fee for developers, without providing further details.

The apparent efforts come midway through a year in which Apple has seen its fortunes rise and fall in China.

Sales of the company’s iPhone surged last month following a wave of sales and markdowns in China, with the company discounting into the country’s June 18 shopping festival. Apple hopes to recover ground, as noted here last month, amid competition with Huawei and other local smartphone providers.

During the company’s quarterly earnings call last month, Apple CEO Tim Cook said that iPhone sales in China had climbed during the previous quarter.

“We still saw growth in the iPhone in some markets, including mainland China,” Cook said, as sales from the greater China market fell 8% from a year ago.

In response to analysts’ questions about China, Cook said: “What we saw was an acceleration from Q1, and it was driven by iPhone. … The other products didn’t fare as well, and so we clearly have work there to do. I think it has been and is, through last quarter, the most competitive market in the world.”

Meanwhile, Apple’s own app store continues to come under fire from regulators, including in Europe. Last week brought reports that the European Commission was set to charge Apple after finding the company wasn’t complying with a rule requiring it to let app developers notify users of offers available outside Apple’s App Store without charging them fees.