Huawei ships 100m smartphones on global, premium push

DEC 23, 20152:29 PM

[HONG KONG] Huawei Technologies Co shipped more than 100 million smartphones this year as a drive to attract higher- end customers helped defy an industry slowdown that hit rival Chinese vendors.

China's largest mobile brand boosted shipments by 33 per cent and moved into the top three globally, the Shenzhen- based company said in a statement on its website. Samsung Electronics Co and Apple Inc are the world's two biggest producers.

Huawei, which debuted its first Android device in 2009 to complement its main business of making networking equipment, is pushing into markets from the US to Europe to take on Apple and Samsung.

Expanding beyond China, where slowing market growth has hurt Xiaomi Corp and Lenovo Group Ltd, is part of a goal to sell 60 percent of smartphones overseas and generate about US$16 billion of revenue from phones this year.

The company bets on "the trend among consumers to upgrade to higher-end devices from entry-level smartphones," John Butler and Matthew Kanterman, analysts with Bloomberg Intelligence, wrote Tuesday. "Huawei is likely to maintain this tack in 2016, as it invests in expanding its mid-range and high-end smartphone product suite."

A third of the smartphones shipping by Huawei in the third quarter cost more than 2,000 yuan (S$434), the company said.

Zeroing In Growth at Huawei, founded by former Chinese army engineer Ren Zhengfei, comes as IDC forecasts domestic market growth will slow to the low single-digits this year. That has rippled through a domestic industry crowded with brands such as Gionee, OnePlus, Oppo and Meizu, backed by Alibaba Group Holding Ltd.

Xiaomi is in danger of missing its target of selling 80 million smartphones in 2015, people with knowledge of its production plans said earlier this year.

The startup founded by Lei Jun saw domestic shipments drop in the third quarter in their first-ever decline, according to researchers at Canalys and IHS. Through the first nine months of this year, Xiaomi moved about 53 million smartphones.

Lenovo meanwhile is struggling to turn around the Motorola brand it acquired in 2014. The company is taking US$900 million of charges to cut costs and restructure the division.

Still, the Chinese market has proven volatile in past years. Xiaomi once led local vendors through viral marketing and crafting a social-media experience for its users. It's now ranked fifth globally, behind Lenovo.

Huawei accounted for 7.5 per cent of all phones shipped globally in the third quarter of 2015, behind Apple's 13.5 per cent and Samsung's leading 24 per cent, according to IDC.

"We hope to be able to sustain our growth in 2016," He Gang, Huawei's smartphone products president, said in the statement.

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