Huawei Technologies Co. Ltd., the world’s third largest smartphone maker behind Samsung and Apple Inc (NASDAQ:AAPL), is making a big push to contract the gap with its other two major rivals, Richard Yu, the head of Huawei’s consumer highlighted earlier on Thursday. Huawei, being one of the world’s largest makers of telecommunication equipment, completed more than 100 million smartphone shipments globally last year, leaving behind both Apple and Samsung.
According to Mr. Yu, the company aims to close the gap and surpass both of its global rivals in the next four to five years. In 2015, Huawei performed beyond expectation both in the mainland territory and a major part of European market. In FY15, the company’s Northern European and Central Eastern region smartphone sales jumped 125% on a year-over-year (YoY) basis. Similarly, China’s biggest smartphone maker also supplied more than 3.46 million smartphones to other European regions, which represents a whopping 114% YoY increase, according to Xinhua news agency. In European region, the company’s bestselling models included high end P7 and P8 models. It sold more than 200,000 P7 model and nearly 750,000 units of P8 Lite.
A report published by GFK research firm highlighted that the Huawei’s smartphone market share in Poland and Finland reached approximately 19% and 15%, respectively. According to Mr. Yu, the company received significant success in such a short span of time, which itself is a milestone. He further highlighted that the company’s elegant, effective, and refine brand strategy has played a significant role in enhancing its overall sales. Similarly through an effective brand awareness campaign, the company is committed to provide users with unique and ultimate experience.
Likewise on the homeland territory, Huawei’s performance has been extraordinary. Despite the recent economic growth slump in the world’s second largest economy and a slowdown in the smartphone market, which caused severe damage to the Silicon Valley based Apple who sold more than half of its iPhones to Chinese customers and Seoul based Samsung, Huawei’s performance still outperforms. Currently, the company holds more than 15% market share in China, despite having intensive competitive environment. In the past, the Chinese mobile market was dominated by the likes of Apple and Samsung; however, the tables are now turned. According to Mr. Yu, strong sales in China was mainly attributed to the increasing sales of its high-end (premium) smartphones.
Overall, according to Mr. Yu, the company has strengthened its footing in Europe and China; however, in Japan and the US, it is still a bit behind. In the near future, Huawei is expected to catch up in these markets and Mr. Yu believes that in five-year time, the company will have more than 20-25% of global market share.
Based on quarter-over-quarter (QoQ) data, it is evident that Huawei’s performance has shown a significant improvement in the past four quarters. Its global market share rose from 4.1-8.7%, and analysts opine that the numbers are likely to go up further. Ahead of Huawei stands Samsung with 21.4% market share and Apple Inc. with 13.2%. Despite being ahead of Huawei and Apple, Samsung’s market share is on a consistent decline.
Huawei in the US
After achieving significant success in China and Europe, Huawei is now determined to enter the US market which is dominated by Samsung and Apple. Apple owns nearly 36% of the market, while Samsung’s market share is close to 26%. It will be difficult for Huawei to crack the dominance of Apple and Samsung in a short span of time. Mr. Yu indicated that Huawei will look to target the US customers with its high-end (premium) smartphones. It has already introduced its high-end Mate 8 in 2015, and P9 smartphone this year in the US, the first ever smartphone with a “dual-camera system, with (German optics company) Leica Camera. “ According to Mr. Yu, there are rumors that Huawei’s competitors are also likely to launch the dual camera smartphone this year. He highlighted that Huawei will always be the pioneer in technology.
Huawei is also collaborating with Alphabet Inc (NASDAQ:GOOGL), to launch a highly efficient (Android smartphone), Nexus 6P. Mr. Yu also highlighted that the product has received very good customer feedback. Moreover, Huawei will launch its MateBook, the two in one laptop and smartwatch this year. According to the head of consumer segment, the company will need time to build its capability as the US customers usually receive smartphones from carriers, so it has to build and cooperate with leading carriers to promote the company’s flagship smartphones.
It is also important to note that Huawei is banned from selling its network equipment in the US amid security concerns. However, Mr. Yu believes that it will not affect the company’s progress in the US as now customers wants better innovation, better product, and the best ever user experience. According to Mr. Yu, Huawei aims to stand out in the smartphones by introducing professional camera capability to its smartphones. At present, more people are using smartphones to take photos instead of digital camera, so it is important to innovate according to the consumer’s preferences and Huawei has done exactly the same.
The Chinese smartphone maker has already captured a greater European and Chinese market and now it plans to achieve the same success in the US. To carry out the process in an efficient manner, Huawei has also allocated a team, which will look after the needs of the US consumers and their technological preferences so the product can be developed accordingly. Furthermore, the Chinese smartphone giant plans to open a software design studio in San Francisco this year. The opening is subject to regulatory approval.
Huawei is also collaborating with Alphabet for virtual reality and the Daydream product and will soon launch a smartphone with this new virtual reality technology inside, said Mr. Yu. The upgrading in technology is likely to enhance growth opportunities for the Chinese manufacturers to contest in the global market and attract potential buyers both inside and outside China.