Samsung and Apple should be looking over their shoulder. Although hardly heard in North America, especially in the United States, Huawei Technologies of China is set to challenge the dominance of the two biggest mobile makers in the $219 billion smart phone market.
Huawei’s business strategy is simple: give consumers an option to get inexpensive mobiles. The company has probably already leapfrogged Blackberry maker Research in Motion Ltd and Nokia Oyj in the second quarter, making it the third largest maker of smart phones.
Huawei joined the handset market about a decade ago, providing bare-bones mobiles to cash-strapped consumers in several emerging economies. As the company grow, it shifted its focus on phone models with faster chips and better screens. If this trend will continue, Huawei will probably siphon users away from Samsung and create a wider gap between it and other smaller competitors.
Presently, Huawei is still way behind Apple in terms of handset sales in the US but Huawei is working to narrow that gap by selling its handsets to carriers like T-Mobile and AT&T. These carriers began selling Huawei’s Impulse phone this coming September at $30 per unit. Another US carrier, Deutsche Telekom AG, also began selling two models of Huawei’s MyTouch models last July 11.
Although inexpensive, Huawei’s phones offer many similar features found on high-end smart phones and also allows easy access to a host of apps available in Google Play store.
Usually, wireless carriers pay the full price of the phones and sell them at a cheaper price to their customers in exchange for multi-year contracts to use their service.
Huawei aims to succeed in the smart phone industry if wants to sustain its growth since entering becoming a company in 1987. It was founded to provide hardware to China’s phone companies propelling it to become an $18 billion business it is today.
The biggest hurdle the company is facing today as a brand is the company’s ties to the Chinese government, which bans it to sell more sophisticated networking equipment in the United States. It is also plagued by some intellectual-property issues over the years.
Bagging the number one spot held by Samsung today is still a real challenge although Huawei has the potential to take share from other weaker rivals. Both Samsung and Huawei are using Android as operating system for their phones but Samsung has an edge in cost since the company is also the manufacturer of many of its screens, chips, and other components in its phones. Over the years, Samsung has also reinforced its brand by coming up with advanced features like motion-sensing tools and face recognition.
However, where Samsung leads over the technical aspects, it is also vulnerable because it does not control its own software platform like Microsoft, Google, or Apple. That gives its other competitors an advantage in attracting customers by offering lower-cost competition. And this is what Huawei is trying to exploit in its bid to be a recognized phone maker. Low cost labor and booming smart phone sales in China greatly helps Huawei grow as an international phone maker to be reckoned with.