Chinese smartphone vendor Huawei has made its aspiration to be the world's leading smartphone vendor by unit shipments quite clear in recent years. The company is currently the third-largest vendor by this metric, behind second-place Apple (NASDAQ:AAPL) and first-place Samsung (NASDAQOTH:SSNLF).

While Huawei has done a good job gaining share in the low-end and midrange portion of the smartphone market, the company wants to increase its sales of high-end and premium devices. Such devices are pricier and tend to command higher profit margins than low-end and midrange smartphones, so there is significant incentive for smartphone makers to try to bolster their offerings in this area.

Apple's iPhone 7 smartphones showing different portions of the Apple App Store.

Image source: Apple.

On March 27, Huawei announced its new flagship smartphone, the P20 Pro. The key selling point of the smartphone is the rear-facing camera subsystem. There are three rear-facing cameras in all. One is a 20 megapixel black and white sensor, the second is a 40 megapixel sensor with large 1 micrometer pixels and very strong low-light performance, and the third camera is an 8 megapixel telephoto lens that enables 5x hybrid zoom .

According to testing performed by DXOMark, the rear-facing camera of the Huawei P20 Pro achieves a total score of 109, with photo and video sub-scores of 114 and 98, respectively.

DXOMark had the following to say about the cameras:

We are used to every new smartphone camera generation being slightly better than the previous one, but looking at the images and test results from the P20 Pro, it seems Huawei has skipped one or two generations. The results are simply that good. The P20 Pro's triple camera setup is the biggest innovation we have seen in mobile imaging for quite some time and is a real game changer.

Suffice it to say, the camera on the P20 Pro blows away the one on Apple's iPhone X, which achieves a total score of 97 with photo and video sub-scores of 101 and 89, respectively.

Apple's camera problem

Considering how important the camera is to consumers, the fact that the Huawei P20 Pro easily beats the camera on the iPhone X is nothing short of a catastrophic defeat for Apple from a technology perspective.

If Apple can't correct the issues that plague its current camera development efforts, then at best, it'll have a hard time gaining market share against premium Android phones in a stagnant to declining market. At worst, Apple will actually start to hemorrhage market share at the very high end of the market, particularly in regions like China where Huawei has a strong presence.

Ultimately, I think there is a serious issue within Apple's camera development organization and the defeat of the ultra-premium iPhone X by such a huge margin by Huawei's P20 Pro is yet another data point in a story that's been developing for quite some time. The iPhone X's camera was already edged out in DXOMark by Alphabet subsidiary Google's Pixel 2 and further beaten by the Samsung (NASDAQOTH:SSNLF) Galaxy S9 Plus.

Considering that Apple dedicates tons of resources to just a few products, it was already pretty bad for Apple's $999-plus smartphone to get beaten in camera performance by Google's second-ever smartphone as well as by a much cheaper Samsung phone. Things are just getting worse.

I don't know what the exact issue within Apple is, but CEO Tim Cook's job needs to be to understand why the company consistently fails to deliver benchmark-setting cameras and make the appropriate changes in development resource allocation as well as leadership to ensure that the company builds the world's best smartphone cameras again.