China's Huawei bolstering smartphone strategy, plans to announce new handset

Huawei wants to ship 60 million smartphones in 2013, almost double the number from last year

Chinese handset maker Huawei plans to introduce a new smartphone in the middle of this year, packed with the "best hardware and design," and is preparing to open a slew of new stores in its home market.

The upcoming handset was mentioned when a Huawei official offered the company's road map to become a leading smartphone vendor. This year, the Chinese tech firm wants to raise the bar in the mobile phone market, with new devices featuring top-of-the-line specifications, said Shao Yang, Huawei chief marketing officer for its devices group.

"We need to have the best hardware and design," he said speaking to reporters. "And with the next product we will try to achieve this."

In last year's fourth quarter, Huawei grabbed the third spot for world's largest smartphone vendor with a 4.9 percent market share, according to research firm IDC. This marked a major change for a company that once mainly built unbranded feature phones for the world's telecom carriers.

Last year, 90 percent of the company's consumer devices were sold under Huawei's brand name, Shao said. In addition, the company shipped 32 million smartphones, which made up 60 percent of its total handset shipments in 2012.

But despite the progress, Huawei's handset business and brand recognition still remains far behind Apple and Samsung, which each had over a 20 percent market share in last year's fourth quarter.

"The big doubt is not from the products, but from the brand," Shao said. "How can people know Huawei? What does Huawei mean? And how can this connect to people? This is an issue for Huawei's brand."

The company, however, has set an ambitious target to ship 60 million smartphones in 2013, or almost double the number from last year. To reach that goal, the company is focusing on the handset markets of China, western Europe and Japan, Shao said.

In China, its main market for its phones, Huawei will establish 100 franchise outlets in the country. The company also recently launched a new branding strategy, revolving around the "Make It Possible" tagline, that it plans to support through advertising and sponsorship from partners.

As part of the company's road map, this year Huawei intends to improve the hardware of its smartphones, including their displays, processors and build materials. But from 2014 to 2015, the company will shift gears and devote greater attention to smartphone software, including improving its "Emotion UI", a Huawei developed Android skin.

Earlier this year, Huawei launched its flagship Ascend D2 smartphone, along with a 6.1-inch handset called the Ascend Mate. The company has also unveiled its Ascend P2 smartphone, which boasts download speeds of up to 150Mbps.

But not all have been fans of Huawei's smartphone strategy. Telecom carriers had once relied on the company to build non-Huawei-branded handsets, at set prices and with specific features, using the operator's brand name, Shao said. But as the company moved to sell its own smartphones early last year, telecom carriers reacted by cutting off handset sales with the company.

"They punished us." Shao said. "In Europe 90 percent of our customers stopped business with Huawei in the smartphones. They said, 'Huawei you don't follow me.'"

Many of Huawei's telecom carrier customers, however, have begun returning, and want alternatives to selling Samsung and Apple handsets, Shao said. At the same time, other rivals including HTC, Sony and BlackBerry are scaling back their presence in the retail market, opening up opportunities for Huawei, he added.

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Michael Kan

IDG News Service
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