Huawei has ambitious plans to establish itself as one of the top five smartphone vendors within three years and top three in five years, Victor Xu, chief marketing officer for Huawei Devices, said last night (7 November) at a launch for the Vision smartphone and MediaPad tablet in London.
The Devices part of the business has grown global revenues from US$1.1bn in 2006 to an estimated $6bn for 2011, representing a CAGR (compound annual growth rate) of 40%.
However, the manufacturer acknowledged that the smartphone market is highly competitive, especially in the UK, so it will have to work hard to establish the Huawei brand outside China. The UK is the pilot country for its expansion strategy.
Xu (pictured) said the UK was chosen because it ‘is a complicated and exciting market. If you can break the UK market you will succeed elsewhere’. The company is establishing a London Design Centre, one of three worldwide, to harness the city’s creative base and help it drive innovation and design for its products in the European market. It will be run by Huawei Device UK and Ireland executive VP Mark Mitchinson.
Xu added that the company will attempt to differentiate itself through a combined cloud, pipe (apps) and device strategy. ‘We are number two in the world for fixed and mobile infrastructure networks behind Ericsson,’ he said. ‘Mobile traffic is expected to grow by 2,000 times over the next 10 years.’
Huawei will also differentiate itself by targeting its portfolio at different types of usage: individual, home, office and industrial. ‘We will use different technologies to align the same user experience between different screens, such as tablets, notebooks and television,’ said Xu.
Xu said that Huawei’s portfolio will move beyond white label devices and own-brand entry-level phones to establish a hierarchy of devices within its portfolio ranging from flagship to elite to mass market. ‘We are trying to deliver more complicated devices for the market to choose from,’ he said.
He explained that Huawei would do this by concentrating on promoting the brand based on hero products and by combining its b2b and b2c approach to provide b2p (people) products.
Huawei will also target a particular audience segment of 18-34-year-olds, which it refers to as ‘younger social networkers’ – technically sophisticated, media savvy people, eager to exploit technology. Xu said the company was trying to engage with this audience to help it develop its products. It is using the slogan: ‘Let’s simply share.’
Xu said this year Huawei’s strategy is to focus on promoting brand awareness. In 2012 it will look to expand by exploiting brand preference, and will move into the US, India and Japan. In 2013 it will leverage the brand awareness it has established a look to promote greater brand loyalty by introducing loyalty programmes.
Mitchinson said: ‘We are aiming for 4% market share by the end of 2012 in the UK. Globally, we are looking to double our share. We only introduced our first OEM device, the Blaze, three months ago. Now we have the Vision smartphone and our first tablet, the MediaPad. We expect to add more retailers and operators to our distribution channels as we go into 2012.’
Huawei is expected to release more tablet device next year.