Huawei Technology Company Limited (SHE:002502), the world’s third largest smartphone maker, has achieved pleasing results in 2015 in terms of its products consumption. It completed 100 million global smartphone deliveries, the company announced today.
The company met its year target and became the first China-based smartphone seller to reach such a huge milestone. The number one Chinese smartphone maker has ramped up its shipments to 100 million from three million in the past five years, representing a 33% increase. At present, Huawei controls a 15% share in China’s highly competitive smartphone market. On a global scale, it holds a 8.7% share as per the data released by International Data Corporation.
The following graph shows the global market share achieved by China’s top three smartphone makers.
By looking at the figures, it is evident that Huawei leads the global chart with a 8.7% global market share. The consistent uplift is mainly driven by the outstanding performance of its premium products including Ascend Mate 7 and Honor portfolio. Its high end products shipments increased to 35.5% in the current quarter. Outside China, Huawei products performed incredibly well, surging the company’s revenue.
Behind Huawei comes Xiaomi Technologies with a market share of 5.40%. In the past one year, the company has also shown a ray of improvement by increasing its global market share by 1%. Xiaomi’s Redmi 2A model in China and overseas was the key to its success. Recently, it also made an entry into the Brazilian markets and will soon launch its products in African regions.
Lenovo comes third with a 4.7% market share. Even though the company is strategically positioned, it needs to spend to increase its brand awareness so that it can maximize its global share. It performed better than its rival Xiaomi but in this quarter, its market share declined.
The leading smartphone developer released its first Android phone back in 2009. Since then, it made aggressive attempts to expand its operations outside China into in the lucrative US and European markets. Its high end products including Mate 8 P7 model, and Honor 5X have contributed significantly to its success.
In Northern and Central European markets, its smartphone sales grew by 125% year-over-year (YoY). The company delivered more than 3.46 million smartphones to Europe, representing a 114% YoY increase. Among them, the best-selling were its P7 and P8 models. In Europe, more than 750,000 P8 Lite were sold, implying the increasing demand for its high end smartphone.
Many believe that the company’s refine, elegant, and effective brand strategy along with intensive investment in research and development (R&D) played a vital role in improving its global sales. Huawei aims to provide its customers the ultimate and unique user experience. According to a report, the company spends more than 40.8 billion yuan on R&D in 2014 that makes up 14.2% of its annual revenue. Moreover, it has also set up 16 foreign R&D institutions outside China in the past one year.
In the recent past, the company focused on bringing in influential figures to promote its smartphones. Notable figures include Bayern Munich’s star and Poland international Robert Lewandowski and other sports personalities. This step has helped the company enhance its brand awareness in major Western markets. According to an estimate, brand awareness in Northern European countries averaged more than 60%.
Huawei In The US
Recently, China’s leading smartphone maker is also planning to enter the US lucrative markets, where it faced a ban amid security concerns. However, the tensions between the two governments eased, opening up growth opportunities for Huawei in attractive US market. By early 2016, it plans to introduce its high end Mate 8 to its US consumers. In China, the company has already achieved a noteworthy market share. Likewise, in Europe it is also performing up to the expectations. But we believe that it will be difficult to easily crack the US smartphone market heavily dominated by the likes of Apple and Samsung.
If it wants to achieve the same success it achieved in the Asian markets, the company needs to look after the technological preferences so that it can develop the product accordingly. The smartphone developer is investing heavily on research and development and has also set up a team to look after latest developments and bring about innovation.
China Business News opines that it will take time for Huawei to directly compete with Apple and Samsung in the global market. The company needs to continue spending brand awareness and gain consumer confidence. However, in the long run, Huawei will be going to give tough competition to Apple and Samsung. It will also give them a run for their money.
Previously, the Chinese products faced a certain challenge over “made in China” tagline that used to represent low price and high quantity and low quality products. However, the statistics presents a different picture. The Chinese products are gaining competence globally and quietly improving quality. Now the world’s largest economy is serious to change the perception, which caused the local companies to lose market share and suffered lowering sales. The improvement in quality is likely to enhance growth opportunities for the Chinese manufacturers to contest in the global market and attract potential buyers inside China. That’s why it is important for Huawei to gain consumer confidence by delivering high quality products overseas, especially in the US to successfully implement its expansion plans.