CTIA E&A 2011: Huawei remains on conservative path towards top five

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SAN DIEGO – Huawei Technologies Co. Ltd. said it’s planning on putting greater emphasis in the mobile device space in North America, with hopes of cracking the top five amongst device manufacturers over the next three years. The move would be significant from the vendor’s current position somewhere in the “top 10.”

Speaking at this week’s CTIA Enterprise & Application event in San Diego, the Chinese company said it would look to push for a “democratization of smart mobility” by providing affordable smartphones to the market. This approach should help Huawei gain market share through volume as well as help bolster its brand recognition in the domestic market dominated by the like of Samsung Electronics Co. Ltd., Apple Inc., Research In Motion Ltd. and Motorola Mobility Inc.

That push is expected to be powered by basic devices at the low-end, increasingly powerful smartphones using Google Inc.’s Android operating system and the move into the tablet space. The company touted its Slingboard tablet device that is set to be offered by T-Mobile USA Inc. later this year, which it claims to be the first 7-inch tablet running Google’s Honeycomb 3.2 OS.

To this point, Huawei has made the most progress with second-tier operators like MetroPCS Communications Inc. and Leap Wireless International Inc., where the vendor’s basic phones provided these no-contract carriers with a way to offer free phones to their customers. More recently, Huawei has begun to supply entry-level Android-powered smartphones that has allowed these operators to offer this highly sought-after device segment for less than $200.

Huawei said it plans to continue supporting those players, while at the same time making greater inroads into the tier-one set. It does have several devices currently available through T-Mobile USA, as well as a few devices through both Verizon Wireless and AT&T Mobility. But, with these carriers more focused on the postpaid space and thus able to provide well-known, subsidized smartphones at price points as low as free, Huawei will have its work cut out.

When asked if it would like to expand its brand presence beyond carrier partnerships, Huawei was quick to note that its current customers are the carriers and its main focus is on its customers. Huawei has dipped its toe in the direct-to-consumer market by selling Wi-Fi-enabled tablet devices through big-box retailers.

Going forward, Huawei is set to remain on its conservative approach to the U.S. market, maintaining a tight relationship with domestic carriers that includes at the most a co-branded approach to its mobile devices. However, that conservatism will likely result in the device maker looking to take advantage of stumbles by its larger rivals as opposed to taking a more aggressive approach to gaining market share.

“Huawei, along with fellow Chinese vendor ZTE, has tried for years to break into the network infrastructure market in the [United States], but is constantly thwarted by concerns over Chinese companies controlling critical infrastructure,” noted Ovum chief analyst Jan Dawson, in a report. “This success in the device market is a sign that Huawei is finding other ways to break into the U.S. market, where members of Congress are less likely to get involved.
Both Huawei and ZTE have been very successful outside the U.S. in the network infrastructure market and increasingly in the mobile device market too. If they are able to break into the U.S. market, they are even more likely to break into the top tier of mobile device vendors, which has so far been dominated by companies from the U.S., Europe, and Korea.”

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Dan Meyer

Editor-in-Chief, Telecom Software, Policy, Wireless Carriers
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Dan Meyer started at RCR Wireless News in 1999 covering wireless carriers and wireless technologies. As editor-in-chief, Dan oversees editorial direction, reports on news from the wireless industry, including telecom software, policy and wireless carriers, and provides opinion stories on topics of concern to the market such as his popular Friday column “Worst of the Week.”

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