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January, 2018

Huawei prepares to take on Apple in the U.S.

Original article: The China Times

Shenzhen-based Huawei Technologies, China's top smartphone maker and the world's No. 2 handset brand by shipments, plans to launch its premium Mate 10 Pro smartphone model in the U.S. market next year. Huawei will unveil details about the launch at the Consumer Electronics Show in Las Vegas this week. The Mate 10 Pro competes in the premium handset market with Apple's iPhone X and Samsung's Galaxy S series. 

Analysis:

In the past few years, Huawei has evolved into one of the largest smartphone brands in the world by shipments. It has developed a following in Latin America, the Middle East and Europe, but China still accounts for most of its sales. 


Yet Huawei is not content to measure success in shipments alone. It has invested heavily in R&D in a bid to become a premium smartphone brand able to compete with Apple and Samsung on an even keel. Its premium handsets now sport camera lenses co-developed with the famed German optics company Leica. The Mate 10, introduced in October, boasts artificial intelligence functions. 


Huawei aims to introduce devices to the market with an ideal combination of technologies, the company told Forbes in a September email, adding: “We want to become the most beloved technology and culture brand worldwide.”


Establishing a beachhead in the U.S. will be integral to Huawei's brand-building ambitions. Zhao Zhiming, an analyst at the consultancy Cyzone in Beijing, told The South China Morning Post in a December interview that the U.S. "is the largest goldmine" for premium smartphone brands. U.S. consumers are among the most willing globally to spend big on handsets - and they regularly upgrade their phones, he said. 


At the same time, the U.S. is overall the third largest smartphone market in the world behind China and India. For Huawei to maintain growth momentum, it needs to have a significant presence there - as well on the Subcontinent. 


Cracking the U.S. market will not be easy for Huawei. The company's reputation there has yet to recover from allegations by the U.S. Congress (published in a 2012 report) that its hardware could be used by the Chinese state to spy on America. As a result, the biggest American telecom carriers - Verizon, AT&T, T-Mobile and Sprint - have been hesitant to cooperate with Huawei, Forbes notes. Since carriers are the primary point of sale for smartphones in the U.S. (offering the phones at heavy discounts compared to their standalone retail prices), it's essential for handset makers to work closely with them. 


Earlier this week, The Wall Street Journal reported that AT&T pulled out of a deal to sell Huawei smartphones in the U.S. According to The Journal, Huawei had been expected to announce its new partnership with AT&T at CES in Las Vegas. 


Without support from the big carriers, Huawei has been selling handsets through Amazon, other e-commerce sites and smaller carriers. Of course, its shipments have nowhere to go but up: Last year it only sold 1.4 million smartphones in America, according to research firm Canalys.


In the long run, to establish itself in the U.S. market, Huawei will need to spend as much on marketing as it has on R&D. Without imaginative promotion, the clever bells and whistles on its smartphones won't be enough to pry away American consumers from their iPhones or Samsung Galaxies. 

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