Chinese phone maker Huawei is planning a campaign to win over US consumers, rolling out new mobile phones and wearable devices backed by a marketing effort.
It is a brave move considering that it was only two years ago that the company was branded a spy by US senators who knew at the time that there stance was a case of the kettle calling the pot black.
China’s second-largest smartphone maker, already with more than $40 billion in annual revenue from a wide range of telecom gear and products, is preparing to introduce Americans to several of its smartphones and wearable devices this year, including its youth-oriented “Honor” phone.
Huawei’s US spokesman Bill Plummer said the company’s 2015 US plans will include traditional advertising, online promotion and sports team sponsorships.
He said the company wanted to change its marketing approach to shed its image as a purveyor of cheap technology products.
In December, it touted its new Honor 6 Plus phone on a billboard in New York’s Times Square. Plummer said that was “a sign of things to come”.
He declined to say how much Huawei will spend on its new marketing campaign or what sports team, or teams, it had in mind. In the UK it already sponsors Arsenal, cricket teams in India and rugby clubs in Australia.
At the Mobile World Congress over the weekend in Barcelona, Huawei took the wraps off a smartwatch that will be sold in over 20 countries including the US.
Huawei now intends to appeal directly to consumers with several new phone models, both low end and high end. It hopes to secure deals with carriers, selling online through marketplaces, such as the one operated by Amazon.com, and on its own fledgling gethuawei.com US direct-sales website.
US senators are mostly concerned with Huawei’s networking equipment, but in consumer land, Huawei has a huge problem with brand recognition.
A report said
Samsung faces increased competition from mainland China.
And that will affect Apple’s bottom line too, according to a survey by Taiwanese market research company Trendforce.
It published figures that showed that in 2014 home grown companies Huawei, Xiaomi and others managed to ship 453 million units – nearly 40 percent of total smartphone shipments worldwide.
Samsung is being squeezed by Apple as well as Chinese smartphone brands but Apple itself is showing signs of losing the brand loyalty it largely depends on.
The company predicts that during 2015 the Chinese branded smartphones will account for shipments of 531 million units. That will be a growth, year on year, of 17.2 percent.
But the Chinese brands showed a growth last year of 54.8 percent.
One of the reasons for the smaller growth is because Chinese telcos have been cutting subsidies, making handsets more expensive.
But that is also likely to affect Samsung and Apple too.
When Samsung released its financial results recently, it reported smaller profits on its smartphone devices in the face of increased competition from Apple and others.
Over 375.2 million
smartphones shipped during the fourth quarter of 2014 – that’s up by 28.2 percent compared to the same period the year before.
Apple had been the number two vendor in 11 previous quarters before Q4 2014, but, according to IDC, it was close to a tie with Samsung, the market leader.
IDC now predicts that Samsung could well outstrip Samsung during 2015.
It’s not just Apple that is challenging Samsung – as we’ve reported before, is under challenge from small Android OEMs selling products at much lower margins.
Growth in 2013 represented 40.5 percent but according to IDC, “the market clearly still has legs”. It estimates growth will fall to a mid teen figure during 2015.
The top five vendors for the fourth quarter were Samsung, Apple, Lenovo, Huawei and Xiaomi. The last showed growth of 178.6 percent during Q4 2014, compared to Q4 2013.
Apple and Samsung
were the biggest buyers of semiconductors in 2014.
Together, they bought $57.9 billion worth of chips last year, up by $3.9 billion in 2013, according to Gartner.
In terms of the total market for semiconductor, both companies’ accounted for 17 percent of the total market.
Gartner said the two firms have been top of the semiconductor consumption market for four years in a row.
That, said analyst Masatsune Yamajo, means decisions they make “have considerable technology and pricing implications for the whole semiconductor industry”.
Samsung was still top buyer but its decision to withdraw from some parts of the PC market as well as losing market share to other vendors meant its growth rate wasn’t as great as in the past.
Gartner estimates that the top 10 companies bought $125.6 billion of semiconductors, accounting for 36.4 percent of the whole market in 2014.
After Samsung and Apple, the remaining eight top ten buyers were HP, Lenovo, Dell, Sony, Huawei, Cisco, LG Electronics and Toshiba.
The entire semiconductor market worldwide amounted to $339.9 billions last year.
which is beginning to challenge smartphone players including Samsung and Apple, turned over close to $12 billion in 2014, according to its CEO.
Lei Jun, the CEO of the company, said the revenues rose 135 percent compared to 2013, in a blog on the company’s website.
The company isn’t public but that hasn’t stopped it denting sales of the global giants as well as having an impact on another Chinese manufacturer of telecommunications equipment, Huawei.
Lei claimed that Xiaomi shipped over 60 million phones in 2014, an increase of 227 percent compared to 2013.
But while Xiaomi might well be making waves and causing its competitors some alarm, it’s doing so using a model which doesn’t yield big profits. Estimates are that its margins are in the low single digits.
Although Xiaomi remains a private firm, it is receiving investment from a number of big names in Asia and Reuters claimed the market value of the company is as much as $45 billion.
Tawian’s watchdogs have cleared China’s Xiaomi and other smartphone brands of breaching data protection laws after national security concerns triggered a government probe.
The National Communications Commission said all the 12 brands it had tested, which also included handsets sold by Apple, Samsung, LG and Sony , did not violate the laws.
James Lou, an NCC official who was involved in the testing, said the commission, however, would request mobile phone makers make information transmission more secure.
The probe was started over concerns that the Chinese handset makers Huawei and ZTE were being used as snooping tools by the Chinese.
Taiwan is a bit sensitive to security matters involving China, which is its largest trading partner, but has never renounced the use of force to take back what it deems a renegade province.
Xiaomi, whose budget smartphones are popular throughout Asia, was previously accused of breaching data privacy. In August, the company said sorry and changed a default feature after a Finnish security company said Xiaomi collected address book data without users’ permission.
Taiwan’s government began performing independent tests on Xiaomi phones after media reports said that some models automatically send user data back to the firm’s servers in mainland China.
The probe was then widened to include local and foreign handsets. The NCC report said handsets made by HTC Corp, Asustek, Far EasTone, Taiwan Mobile and InFocus Corp, whose handsets are made by Taiwan’s Hon Hai Precision Industry were also cleared of breaching the data protection laws.
EE, Qualcomm and Huawei have completed a 4G trial which aimed to speed up internet connection and reliability on mobile gear.
The three said that they managed to achieve download speeds of up to 410Mbps when going downhill and with the wind behind it.
It is the first time that LTE Category 9 testing has been tried in Europe and should dramatically improve EE mobile broadband speeds across greater areas.
The test has proved the operator can aggregate 20MHz of 1800MHz spectrum with another 20MHz of 2.66GHz, and a third carrier of 15MHz of 2.6GHz.
Apparently they conducted the test using QTI’s Qualcomm Snapdragon 810 processor and an integrated LTE-Advanced modem, on Huawei’s commercial infrastructure solution across EE’s LTE-A 4G+ network. Double sided sticky tape was not used and apparently the tests were conducted in front of a responsible adult.
Qualcomm said that transitioning from Category 6 to Category 9 LTE-A connectivity will mean 1.5x faster peak download speeds, swift application response times, reliable connectivity and connections to the fastest networks.
EE claimed that using its remaining 15MHz of the 2.6GHz spectrum enables the fastest speeds and an increase in capacity across its network.
EE’s director of network services and devices, Tom Bennett said that working closely with Qualcomm and Huawei on the next generation LTE Category 9 connectivity enabled the company to make full use of our spectrum holdings, and continue to offer world class network capabilities, innovating to stay one step ahead of operators in Europe.
Huawei described the test as “a truly ground breaking moment” in the move towards the 5G era. However, none of the firms confirmed when these speeds will become a reality.
Emerging markets worldwide have accounted for the growth of smartphones in the third quarter of this year, growing by 20 percent.
Gartner said Samsung lost market share, but Chinese manufacturers are showing positive growth.
Altogether, sales of smartphones accounted for 301 million units shipping in the third quarter.
Roberta Cozza, research director at Gartner, said in the third quarter smartphones represented 66 percent of the total mobile phone market. She thinks that by 2018 nine out of 10 phones will be smartphones.
Western Europe saw a decline in growth of 5.2 percent, but the USA saw high growth of 18.9 percent, fuelled by the launch of the iPhone 6 and 6 Plus.
In terms of market share, Samsung holds 24.4 percent of the market, Apple holds 12.7, Huawei holds 5.3 percent, Xiaomi has 5.2 percent of the market and Lenovo five percent.
As far as operating systems are concerned, Android ruled the roost in the third quarter (83.1%), Apple was next with 12.7 percent, Windows only held three percent and Blackberry 0.8 percent.
Cozza said: “The smartphone market is more than ever in flux as more players step up their game in this space. With the ability to undercut cost and offer top specs, Chinese brands are well positioned to expand in the premium phone market too.”
A report said that increased production by major Chinese vendors will topple US players from their grip on the server market.
Digitimes said that Lenovo, Huawei and Inspur are likely to ship a total of two million units in 2015, knocking Dell off the number two slot.
Earlier this year, Lenovo bought IBM’s X86 business and that means the company is likely to ship a million server boxes in 2015.
Meanwhile HP, the market intelligence firm said, will show a decline in server shipments of 10 percent this year.
By the end of next year, the combined shipments worldwide from Chinese vendors is likely to amount to nearly 20 percent.
Meanwhile, the multinationals are threatened by ODMs (original design manufacturers) like Quanta, which are squeezing the Dells and HPs of this world by selling units direct at a knockdown price.
While most people haven’t even moved to 4G phone networks yet, manufacturers are already talking about standards for the next faster generation of 5G phones.
Major vendors are engaging with the formal standards process, according to ABI Research. Those include Alcatel-Lucent, Ericsson, Huawei, Intel, Qualcomm, Samsung, mobile operators and academic bodies.
Research director Philip Solis sad: “These companies are all waving their 5G flags, although 5G definitions and visions remain very vague. But this is not merely marketing. These companies are most certainly putting a stake in the ground that will leverage their, work, competitive strengths, and, most crucially, patents.”
He said that Qualcomm in particular is keeping its head low, but other vendors such as Apple and Google are getting actively involved.
Solis said that efforts by vendors to use their patents will be fiercer than for 4G.
But despite the competitive edge, Solis said that companies are working together “so the standardisation process can hit the ground running”.
Shipments of smartphones worldwide slumped by 25.9 percent in 2014 and will fall again next year by 12.4 percent.
That’s the opinion of market intelligence company Trendforce which said 1.17 billion smartphones left the factories this year and 1.31 billion will ship next year.
The reason, according to Avril Wu, an analyst at Trendforce, is because the penetration rate “is already very high while the market is saturated”.
She said that Chinese brands will represent 17 percent of handset shipments in 2015 – with competition intense. Lenovo, Huawei, Xiaomi, Coolpad, ZTE and TCL are competing on price meaning their margins are as thin as a cigarette paper. Trendforce thinks mergers and acquisitions over the next few years will be the inevitable conclusion of this trend.
Meanwhle, the iPhone 6 continues to sell well but brands using the Android and Windows operating systems find themselves competing on price. This will continue in the coming year.
The 4G network, she says, is now in place and will mature next year, with Qualcomm taking the lead over Mediatek in the semiconductor infrastructure required.
China’s largest telecom equipment maker, Huawei, has found four employees in violation of the company’s policies on corruption.
The four were discovered during an internal inspection and the case has lead the company to conduct training sessions on how to avoid bribery.
Huawei had not provided any details about the case. News outlet Caixin, which first reported the inspection last week, said a total of 116 employees were implicated in soliciting and accepting bribes from outside sales agents in exchange for rebates.
In a statement Huawei said firmly implementing an open, transparent and stable channel policy, in order to pursue fairness and justice in the market, and to “fight firmly against any form of employee practice that fails to meet the standards we set for ourselves.”
This is probably a bad time for something like this to happen. The Chinese government is carrying out a crackdown on corporate misbehaviour within both foreign and domestic firms. This is seen as more popular and less tricky that controlling corrupt Communist Party officials at a local level.
Chief Executive Ken Hu told the Financial Times that graft inspections were done every year and “nothing new,” adding that it only attracted media attention this year.
The Tame Apple Press is fuming that the Chinese phone maker Huawei has managed to steal Apple’s thunder by releasing a phone days before Jobs’ Mob’s traditional Nuremberg style rally.
Normally we do not think of a phone release as being sent as a spoiler to a rival’s event, but it is clear that someone in Reuters does.
Huawei unveiled shedloads of devices meant to showcase the Chinese company’s hardware technology, and Reuters was clearly upset that it was putting the spoilers on Apple September 9 launch.
Dubbing the iPhone 6 as “highly-anticipated” it reminded its gentle readers that Apple was releasing the phone on September 9, even though the story was about Huawei.
Today Huawei markets its devices as comparable to Samsung and Apple products, which are often viewed by consumers as the technological cutting edge, patronised Reuters.
So what has Huawei released? There is a limited edition of its high-end Ascend P7 phone with a sapphire glass display. For those who came in late, Apple was rumoured to be mass-producing devices with sapphire technology and it so far has not happened.
The Ascend Mate Ascend P7 phone7 “phablet” will also be the first Android smartphone on the market with a fingerprint sensor. A fingerprint censor was something that Apple had installed on the iPhone 5s last year, Reuters fumed.
In a statement, the company’s smartphone division chief Richard Yu said the sapphire glass phone demonstrated Huawei’s “advanced craftsmanship” and its ability to “deliver the most advanced technology into the hands of consumers”.
Reuters seemed to think that this particular quote was rubbing it in a bit. The logic being that Huawei is releasing all these products which copy Apple just days before Jobs’ Mob is about to reveal its masterpiece.
That masterpiece, as it turns out, will be likely to be similar to everything else that is already on the market, but will still be plugged to the heavens by journalists who sacrifice their credibly to act as Apple’s unpaid press office.
While Western Europe and the USA are showing signs of saturation for tablet sales, it looks like some regions are continuing to boom.
A report from IDC said that PC tablets grew 111 percent year on year in the last quarter of 2013 in the Middle East and African (MEA) markets.
Shipments amounted to 3.45 million units and both the home segment and the corporate segment showed steady growth. The educational market also saw growth.
Huawei won a deal to supply around 90,000 units in South Africa in the education sector.
Android wins the game – 2.8 million units shipped up 16 percent compared to the same quarter in 2012. iOS fell and Windows OS lost share in Q4 2013.
Top vendor was Samsung, followed by Apple, Lenovo, Asus and Huawei.
The PC market will fall further in 2014, while tablets will grow significantly, IDC said.
IDC said that a billion smartphones shipped worldwide.
There are over seven billion humans on the planet.
IDC said that that vendors sold 1,004.2 million smartphones – a rise of 38.4 percent from 2012 – which equates to 725.3 million units in 2012.
And smartphones accounted for 55.1 percent of all mobile phone shipments in 2013 – a rise from the 41.7 percent smartphone share in 2012.
Samsung was the market leader, with Apple, Huawei, Lenovo and LG occupying the top five vendors.
Samsung shipped 313.9 million units in 2013, Apple 153.4 million, Huawei 48.8 million, LG 47.7 million and Lenovo 45.5 million.
“Others” exceeded Samsung by shipping 394.9 million units during 2013.