Huawei insists its won’t splash the cash to compete with Samsung and Apple in Europe’s overcrowded consumer market. Late last year, Huawei became the world’s No 3 phone maker* from a standing start: it only began selling branded phones three years ago.
Although Huawei itself is now gigantic with 150,000 employees – and a mind-boggling 70,000 engineers working on R&D – the new consumer business group is frugal. That’s because it’s profitable, and the only other profitable smartphone company after Apple and Samsung, the company said at its annual analyst event here in Shenzen today. And it wants to stay profitable.
Huawei shifted 53 million phones last year, most of which are smartphones. Before the Consumer Business Group was launched in 2011, it made them for other people. Surprisingly Europe is one of its target markets, alongside the more obvious home market and emerging economies like Russia and Brazil.
“We will not engage in significant advertising campaigns. We want to leverage word of mouth marketing,” Eric Xu, the incumbent “rotating CEO” said today.
(Huawei has a curious arrangement where three executives share the CEO role, rotating every six months. Xu hinted that this might be replaced by an even more unconventional “team” structure in the future.)
“The principle is to be profitable,” confirmed Shao Yang, VP of marketing at Huawei’s Consumer Business Group.
'We can't waste money'
Huawei’s strategy is to avoid the low-margin end of the market (unlike Landfill Android) and emphasise one or two key differentiators – such as longer battery life than rivals – alongside increasingly smart design, and choice of materials, where “we need to try something new”.
We highlighted some of these differentiators at Mobile World Congress in February. The successor to the current Android flagship, the P6, is unveiled in a fortnight and Yang promised it would feature more unusual materials.
Yang thought Europe was worth fighting for because “consumers are visionary” here and respond to something different. Windows Phone’s rapid rise perhaps supports that case. Then again, HTC has again produced the most attractive design with its M8, yet it’s struggling to gain share.
Earlier in the day Xu observed: “The Consumer Business Group may not be as down to earth as they used to be, simply because of the success they achieved last year. Therefore we cooled that down, so they can become sober to fully understand who they are and where they should go.”
Marvellous stuff. Chinese technology executives tend to be quite frank. ®
* Huawei doesn't actually manufacture: it outsources to others, such as Foxconn (literally) over the road in Shenzen.