With U.S. in mind, China’s Huawei looks to build its smartphone brand
SHENZHEN, China — Chinese tech giant Huawei wants Americans to start thinking of it as a stylish smartphone brand.
Huawei Technologies, which pulled out of the U.S. market for network switching gear four years ago due to security fears, became the No. 3 global smartphone seller last year and passed Apple in China. This year, it launched a new flagship smartphone, the P9, and is positioning it to compete with Apple and Samsung.
“China has yet to create a high-end consumer brand. We want to take that goal onto our shoulders,” Eric Xu, one of Huawei’s three rotating co-CEOs, told industry analysts at a meeting in April.
To do that, Huawei must succeed in the United States the second-largest market for handsets after China, accounting for one-sixth of global sales, according to industry analysts. There, it starts with almost no market share and a name that consumers, if they know it at all, might associate with anxiety about possible Chinese spying rather than technology and style.
“It is more difficult than any other market they have ever entered,” said Nicole Peng of research firm Canalys. “I don’t think they have concrete plans yet.”
Outside the United States, the company is cranking up a global marketing campaign for the P9 featuring Hollywood stars Henry Cavill and Scarlett Johansson. For markets from Bangladesh to Mexico, it has recruited pop singers and football teams. It partnered with German photography powerhouse Leica to develop the camera on the P9.
The company has yet to say when it might sell the Android-based P9 to Americans or exactly how it will rebuild its U.S. presence.
“We’re definitely very patient with the U.S. market,” said Joy Tan, Huawei’s president for communications, when asked how it planned to connect with buyers. “We hope these phones will be accepted by American consumers.”
To meet its ambitious sales growth target of 30 percent a year, Huawei must increase its U.S. market share to double digits from below 2 percent now, said Peng of Canalys.
Huawei, pronounced “HWAH’-way,” has big resources to back up its aspirations.
It made a $5.7 billion profit last year on sales of 395 $60.8 billion. That was equal to just one-quarter of Apple’s sales, but Huawei spent $9 billion on research and development to Apple’s $8.1 billion.
Huawei shipped 108 million handsets last year, the first Chinese company to pass the 100 million mark. That is a distant third behind Samsung Electronics’ 325 million handsets and Apple’s 231.5 million.