With over 34 million smartphones shipped in the first six months of 2014, Huawei is ranked third worldwide top vendor, just behind Samsung and Apple. The Company also shipped 40% of its handsets outside of China as it wants to expand more and more on the global stage.
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From B2B to B2C
Taking a look at Huawei’s story, one would think that the success of the firm lies in its sale of handsets. However much of the company’s international business deals are in building, upgrading, and maintaining infrastructures, especially LTE networks.
When willing to enter a country’s market, Huawei will often sign contracts with government entities, to ensure their company the image of an reliable brand. Then the company likes to operate as a partner or a vendor for the country’s telecommunication companies – either for handsets or their network infrastructure, while studying the market and the culture of the country in the meantime.
After what a brand awareness campaign will be launched. Last year after the launch of the Ascend P6 smartphone in Thailand, the company planned to spend at least $2.5 million to advertise the brand. Several steps in order to impose itself on a new market and finally sell their own brand of handsets directly to consumers.
However Huawei’s international development has known some shadows in the painting. The company suffered the US government’s accusations last year. They were suspected to be leaving backdoors that could have been used for espionage, when installing their technology. The US skepticism was shared by India and Australia that both banned Huawei from handling government contracts. Huawei also met criticism for unsatisfactory work in Iran and Uganda.
So that in April 2013, the vice president from Huawei announced that the company had no interest in the US market anymore. Since then, Huawei orientated its development strategy to other areas, namely Asia, Africa, and Europe. A re-orientation that seems to be paying since the Company shipped 40% of its handsets outside of China in the first quarter of 2014.
Looking to the future
In September, Huawei bought “Neul” an industrial applications UK startup for US$25 million. The start-up focuses on sensors that can have many useful functions in order to create smart city. These sensors could for example, send alerts when public trash bins need to be emptied, among many other functions.Huawei, as a world leader in building and maintaining mobile infrastructure chose to expand things of Internet related infrastructures into mass-scale. A logical move that complements its existing strategy.
In the growing market of telecommunications manufacturing, Huawei is one of the top 3 worldwide leaders. Despite the fact that the company suffered mistrust issues for a while, it is still on the rise. However, within this highly competitive field new phone manufacturers such as Xiaomi are gaining a more important part of the market share every day. That is why longer established companies like Huawei need to innovate and to diversify in order to stay one step ahead of the competitors.