According to foreign reports, Chinese technology giant Huawei hopes that American consumers will start to regard themselves as a fashionable smartphone brand.
Huawei, which failed to obtain orders for US carrier network equipment due to national security concerns four years ago, has become the world's third-largest smartphone maker last year. The company launched its new flagship smartphone P9 this year to better compete with Apple and Samsung Electronics.
"China has not yet cultivated a high-end consumer brand. We hope to shoulder this goal," Xu Zhijun, Huawei's rotating CEO, told industry analysts in a meeting in April this year.
To achieve this, Huawei must succeed in the world's second largest smartphone market, the US market. Statistics show that the US market currently accounts for one-sixth of the total global smartphone shipments. For consumer electronics companies like Huawei that make American consumers more likely to connect Chinese spies, not technology and fashion, it's hard to imagine the difficulty of developing in the US market from scratch.
Nicole Peng, an analyst at market research firm Canalys, said, "The US market is harder than any market that Huawei has entered. I don't think they have a specific plan for this market."
Outside the US market, Huawei hired Hollywood superstars Scarlett Johansson and Henry Cavill as image spokespersons to create momentum for the new flagship smartphone P9. Whether in Bangladesh or Mexico, Huawei promotes its products with local pop singers and football teams. Huawei also formed a camera for the P9 in the German camera manufacturer Leica.
So far, Huawei has not decided when to sell P9 in the US market and how to rebuild it in the US market. When asked about how Huawei plans to connect with American consumers, the company's spokesperson, Joy Tan, said, "We are of course very patient with the US market. We hope that these phones will be accepted by American consumers. â€
Canals's Nicole Peng said that in order to achieve the goal of 30% annual revenue growth, Huawei must increase the US market share from the current 2% to double-digit percentage.
Huawei's profit last year reached RMB 36.9 billion (US$5.7 billion), with revenues of RMB 395 billion (US$60.8 billion). Although this is only one-fourth of Apple's annual revenue, Huawei's annual R&D spending reached $9 billion, which has exceeded Apple's $8.1 billion.
Last year, Huawei’s smartphone shipments reached 108 million units, making it the first smartphone in China to ship more than 100 million units. Although the company has become the world's third-largest smartphone maker, shipments still lag far behind Samsung's 325 million units and Apple's 231.5 million units.
Huawei currently only sells smartphones in the US market through official websites. But Tuong H. Nguyen, an analyst at market research firm Gartner, believes that Huawei may cooperate with US mobile operators in the future to help the company sell smartphones. The analyst said in an email, "Huawei's deep understanding of mobile technology can be used to quickly release high quality products."
Huawei's development in the US market relies on overcoming lingering security concerns. In 2012, the US Congressional Security Committee ordered Huawei and ZTE not to participate in equipment procurement bidding for US carriers, and recommended that US companies avoid doing business with the two companies. The previous year, the US government blocked the acquisition of a California computer company by Huawei.
Analyst Tuong H. Nguyen said, "This also makes it difficult for Huawei and other Chinese equipment manufacturers to enter the US market." Huawei has denied the above charges, saying that US criticism has not received sufficient evidence. As a private company, Huawei subsequently began to release financial data to increase financial transparency and ease Western security concerns.
As far as ZTE is concerned, the company has quietly entered the US smartphone market. Canalys' statistics show that ZTE's share of the US smartphone market reached 4% last year. However, the company is currently competing in the low-cost smartphone market in the United States, and is not as eager to compete with Apple and Samsung Electronics in the high-end smartphone market as Huawei.
Founded in 1987, Huawei has become the first Chinese manufacturer to enter the first-line camp of the technology industry, and competes with Nokia and Ericsson for orders for network equipment and wireless base stations. Huawei employees joked that after 20 years of quiet operation behind the scenes, Huawei has become one of the big companies that no one knows.
Glory Cheung, president of Huawei's consumer business unit marketing, said that Huawei's priority this year is that "marketing allows many people who don't know the company, especially those in Western countries, to understand the company."
By drawing on the simple design of Apple's products and the development of women's smart watches by Swarovski, Huawei is cultivating a luxurious image for its smartphones.
Huawei followed Nokia's footsteps in the 1980s to get involved in the consumer electronics market. At the time, Nokia began to sell mobile phones from a device manufacturer. After 20 years, Nokia dominated the global mobile phone market and then went down when smartphones became popular. In 2014, Nokia sold its mobile phone business to Microsoft and became a manufacturer focused on network equipment.
The disappearance of Nokia in the mobile phone market indicates that if “the leader makes mistakes,†the market changes will be exceptionally fast. However, Canalis analyst Nicole Peng believes that Huawei wants to replace Apple or Samsung Electronics, which is "a very aggressive goal." She said, "Huawei continues to retain the third market position, but wants to enter The next level of difficulty will be very large."
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