In the recent Consumer Electronics Show in Las Vegas, Huawei Technologies, China’s biggest smartphone maker launched its high-end Mate 8 smartphone to US consumers, marking the world’s third-ranked smartphone developer's ambition of entering the lucrative US smartphone market.
Huawei's equipment, including switches and routers, faces a ban in the US amid national security issues. But the company plans to gain a significant market share through its consumer products like high-end smartphones. Its premium Mate 8 is worth $644 and is affordable to many US customers.
America’s smartphone market is dominated by Apple Inc (NASDAQ:AAPL) and Samsung and it will be a difficult test for the Chinese smartphone maker to crack their dominance in the country. However, the company is growing its business at a rapid pace and it is aggressively investing on research and development (R&D) to meet the needs of its customers in the US. Huawei has established around 16 R&D centers globally and the company makes its own components, which gives it a cutting edge as most Chinese vendors depend on third parties for components.
Huawei Head of Consumer Business, Richard Yu, indicated that Huawei’s consumer products reported a 70% growth in sales in 2015, while the company completed shipments of 100 million smartphones in fiscal year 2015. The growth in sales was majorly attributed to its European and Middle East segments where the company performed better than expectations.
Mr. Yu further highlighted the fact that a few years back, no one knew Huawei, but it has now become the world’s third largest smartphone maker with 9.7% of the global market share behind Samsung with 28.3% market share and Apple’s 11.8% market share. By presenting the following graph, China Business News would like to compare Huawei’s performance compared to its major global competitors.
Based on quarter-over-quarter (QoQ) results, Huawei’s graph has improved in the past three years as compared to Samsung and Apple's. Samsung's market share has declined in the past three years primarily due to the poor performance of its high-end Galaxy smartphone series. Apple’s iPhone sales, on the contrary, paved the way for the company’s growth in the past three years.
Meanwhile, Huawei consistently performed very well, with its low-end and high-end products both grabbing a significant amount of sales. In the Middle East and Asian region, it generated revenue through its low-end phones, while in the European and the US markets it focused more on its premium products. Analysts believe that if Huawei continues to perform brightly the company can soon give Samsung and Apple a run for their money in the US markets.
Through its extensive R&D, the company is keen to manufacture its own components and develop smartphones according to consumers' needs. In China, it has already established a significant name, and now Huawei aims to expand its portfolio into the European markets. It has devoted its attention to Western Europe and has also set up a design facility in Paris. In Spain, Huawei ranks behind Samsung, and in Italy it is the third ranked smartphone maker behind Samsung and Apple.
It will take time to capture the US markets where the company does not own even 2% or 3% of share. However, it is a better than expected start for Huawei and allow it a platform to build on.