Mark Mitchinson on Huawei’s strategy for the UK

Mark Mitchinson on Huawei’s strategy for the UK

Why do you have so much faith in Huawei being able to break into the UK smartphone market?
‘Huawei has pedigree, tremendous scale and great form across the telecommunications technology business. Innovation and a proven formula for success in the infrastructure business gives us a great opportunity and of course expectation.  Our 2010 sales revenue was around US$30bn; our five-year CAGR in revenue is 29%, our five-year CAGR in profit is 57%.

‘We are number two in terms of infrastructure and number one for mobile broadband and fixed-wireless terminals. Huawei is number five, globally, for Android smartphones. Innovation is our lifeblood and as we all know, change is the only constant.
‘We also have great ambition and the market dynamics in terms of handset brands are constantly shifting. The UK is a mature and hugely competitive market, but we believe there is an opportunity for a fresh and exciting new brand in smartphones within it.

‘Huawei will shake-up the market by presenting discerning shoppers with products that engage and excite. We’ll deliver contemporary tech with flourishes and a brand that is not cold, tired, elitist, square or arrogant – but a brand that is dynamic, innovative, trusted and, most of all….welcoming.
‘We know it’s not going to be easy and we’re not expecting to click our fingers and make everything perfect; these things take time and in my view people come first! I believe wholeheartedly in the abilities of my current team and over the coming months we will look to bolster that team significantly.

‘We have just recruited Jim Powell as head of product management from Samsung, Richard Ward as account director from LG and Med Jeewoth as account manager for the open market. These are just a few of the key individuals that will help us to achieve great things in the years ahead.’
How do you plan to make the Huawei Blaze and subsequent Huawei smartphones stand out in what is a crowded, highly competitive UK market full of well-established rivals?
‘The Blaze is a well-crafted, well-specified, well-priced Android smartphone from a fresh and exciting new consumer brand.
‘It is effectively the first Huawei-branded device we have launched into the UK market. We have done away with old naming conventions. It marks an entry point for the Huawei brand and a statement of our future intent. Elsewhere, the company has retained its original name, Ideos X3. In the UK, we have taken the decision to go with the master brand (Huawei) and the device name ‘Blaze’. This is important for the UK in terms of our strategy, and in terms of the UK’s role in global strategy.
‘The Blaze will be keenly priced and it packs a lot of punch for under £100. The Blaze is affordable and is likely to be a lot of people’s first smartphone. The Blaze has the latest Android OS (Gingerbread 2.3), which makes it easy to navigate, easy to use and it is power efficient. It has a full multimedia suite, Google suite, integrated SNS feeds, front-facing camera, fast-boot, a proprietary back-up function and over-the-air OS upgrades. I believe it will stand out, as will the launches later this year of Vision and MediaPad.
‘It’s also going to appeal, clearly, to certain demographics. I am delighted to have Phones 4u and Tesco Mobile in support as we start this epic journey. As well as anyone in mobile phone retail, they understand the UK youth market and the UK value segment exceptionally well.
‘Subsequent devices will build on the Blaze proposition, and be supported by a growing brand story. I would suggest that, despite the maturity and competitiveness of the UK market, there is little loyalty to many manufacturer brands. I would also suggest Huawei can capitalize here, and take share from them with an innovative and dynamic brand story, and beautifully made and well-specified products that offer wonderful value.’
How long do you think it will it take for Huawei to join the 'A' league of smartphone brands in the UK?
‘As I mentioned, it will be no easy task, but it’s important you put a stake in the ground. There is a lot of work to be done and many hours will be spent driving the ambition. I’m fortunate that my team are fully behind me. The global (HO) ambition is to be among the very top smartphone brands within five years, and I see no reason why we cannot be competing on the UK high street with the very biggest brands in a reasonable timeframe.’
How do you plan to market the Huawei smartphone brand? Will this be via a major marketing campaign or something subtler?
‘You’ll have to wait and see.’
Can you tell me more about the 'Who are we?' campaign?
‘The burst of advertising in the trade media is to prime the market, in the first instance. It’s a fun, fresh approach and clearly a play on words. Huawei is known to the telecommunications industry incredibly well, but we want it spoken of in a different way. We want the market to know we are serious and ambitious too. We also want future partners to join this incredible journey and not be fearful and overly cautious, but engaging. This separate marketing is part of a much bigger announcement to the UK industry – which will be clear shortly.
‘I would add, however, that our past and our ongoing device relationships, are essential to our future as well. Our ODM portfolio will absolutely remain a key part of our business in the UK. We are not building a brand at the expense of that very successful ODM business, but to compliment it.’
How many Huawei-branded smartphones do you plan to launch this year and over the next 12 months in the UK?
‘There will be several, but I would not put a number on it as yet. The immediate roadmap, in terms of smartphones and tablets only, includes the Blaze, Vision, MediaPad and the Honor.’
Will you be making more Huawei-branded smartphones than white label smartphone’s next year? What is the balance of the two at the moment and do you see a time you will phase out the white label operation in the UK?
‘Again, I would not like to say. Our OEM/branded smartphone portfolio is pretty small right now. We currently have the Vodafone Smart and the Orange Barcelona and Stockholm (also with T-Mobile under different names) in the market now as ODM products – again, in terms of smartphones only. We expect the balance to shift towards Huawei-branded products as the Blaze and subsequent devices launch…..but we want to grow our ODM business, equally.’ 
Which operators and retailers stock Huawei white label smartphones? Which of these will stock Huawei-branded phones? Are they supportive of Huawei developing its brand?
‘Huawei, as a business, is built on its industry relationships, particularly with network operators, and we are committed to continuing that work with them. At the same time, brand is essential to grow our handset business, both globally and in the UK.’
Do you have any new retail or network deals imminent?
‘We will discuss distribution of our products over the coming months.’
What is your tablet strategy? How can Huawei compete in this market against much more established players?
‘The tablet market remains in its infancy. For the time-being, we think we have a very well-equipped range in the S7 Slim and the MediaPad, which are both seven-inch devices. So far, tablets appear to be devices for consumption of content, as opposed to production of it, I would suggest the seven-inch form factor makes good sense. It is portable and compliments a laptop for remote working and your home set-up too.
‘The MediaPad, in particular, has had early rave reviews. It is the world’s first seven-inch Android 3.2 Honeycomb tablet and represents a complete entertainment powerhouse, driven by Qualcomm’s dual-core 1.2GHz processor. It provides a fabulous user experience in a stylish, high-performing and ultra-portable package.  It is slim line and lightweight and supports 1080P full HD video playback, featuring a 1.3-megapixel front-facing camera and five-megapixel auto-focus rear-facing camera with HD video recording capabilities.  It’s a compelling piece of kit.’
Are you planning to broaden Huawei's distribution channels and if so, with whom and why?
‘We have no immediate plans. We work with 20:20 Mobile and Data Select in the UK. I think distribution has, to a degree, grown up and is starting to add value. I am encouraged that both partners see Huawei of immense strategic importance to them and can help us reach the channels and the consumers we all strive to serve.’ 
What is it you are looking for from distributors?
‘A win-win partnership, incorporating co-prosperity.’  
How many UK staff is Huawei taking on this year and how many next year? In which divisions?
‘We have around 25-30 in the UK device business, and we’ll beef that up by 50%-60% in the coming months. Mostly in marketing and product management, as well as in sales. Huawei Technologies in the UK has a total headcount of around 500, and will double that number by 2015.’

Who do you want to buy your phones?
How can Huawei break RIM's hold on the youth market in the UK?
‘I think the youth market is, by its very nature, fickle and always looking for change.’
How significant is Google's acquisition of Motorola to Huawei as an Android manufacturer?
‘Huawei has a close relationship with Google. It is a part of the Open Handset Alliance, and has the ability to launch devices with the very latest versions of Google’s Android OS, as they are available. We are focused on Android, and consider it to be the most open and user-friendly OS on the market at this time.’
Do you plan to use other operating systems on your devices? Which ones and why?
‘We have said we will not discount working with other OS makers, and Windows Phone 7 will be considered as we move forward, but nothing has been confirmed.’ 
Would you consider developing an Huawei OS?
‘No comment.’
Are you interested in buying HP's Palm webOS?
‘No comment.’
What are your plans to target the enterprise market?
‘We are focused on building a consumer brand in the first instance in the UK and Ireland, although we think our devices work well in certain business environments and can be used very clearly by independent sales channels to differentiate themselves. We continue to have close dialogue with our partners.’
What are your plans for the contract market?
‘The Blaze will be available on contract, as will the Vision. Our upcoming portfolio will cover the market.’
How important is the prepay market to Huawei?
‘The prepay market is still important and with the recent changes in subsidy we can capitalise.’
Are you confident Huawei will allow you the autonomy you need to get the job done?
‘Huawei has been open, receptive, collaborative and engaging. I’m pretty sure I know what’s right for the European market and I’ve been part of that success over a number of years now. Time is always the barometer, but the intent is clearly there. What’s critical is that we are seen appropriately as a brand by our customers and consumers in Europe. I am confident the UK business will, under my leadership, make an impression on consumers and a mark on the industry as a formidable new brand and a dynamic and collaborative partner.’

Written by Mobile Today
Mobile Today


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