By Tan Min
BEIJING ( Caixin Online ) ? Huawei Technologies Co., well-known as a provider of telecoms network equipment and technology solutions, is enjoying impressive results in its mobile handset business after years of low-profile development.
Market research institution International Data Corp. (IDC) says Huawei sold 10.8 million mobile phones around the world in the fourth quarter of 2012, third behind Samsung /quotes/zigman/189458/quotes/nls/ssnlf SSNLF +1.85% ?and Apple /quotes/zigman/68270/quotes/nls/aapl AAPL -0.31% .
Many people are not surprised by Huawei?s quick growth in handset sales considering its continuous development of smart phones and close relationship with international telecoms operators.
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Huawei sells its products in more than 140 countries. In the early days, its handsets were mainly sold with contracts or as part of special offers, but the phones lacked clear branding. Such deals gradually cultivated customers in many countries.
The rise of 3G wireless service has changed the structure of the global telecom market and granted more say to operators. Its close relationship with global telecom operators has been a boon to Huawei.
The year 2010 was important to Huawei?s mobile phone business. The company adjusted its business strategy to meet growing domestic demand for cheaper smart phones. Since then, it has put more emphasis on mobile phone development and marketing.
Global giants such as Samsung, Apple and Nokia have long ignored the lower-end market. Meanwhile, many of China?s domestic phone makers lack advanced technology. This provided Huawei with an opportunity.
Its first 3G mobile phone designed for China Telecom, the C8500, sold over 1 million units in its first 100 days. By the end of 2010, Huawei had sold 20 million 3G phones in partnership with China Telecom /quotes/zigman/313142/quotes/nls/cha CHA +0.40% ? /quotes/zigman/26108 HK:728 -0.95%
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Huawei soon took this domestic strategy overseas, winning considerable market share among low-end smart phone users, especially in Africa and Latin America. A source from the company?s mobile phone operation says its overseas phone sales were now greater than in the domestic market.
Clearly, Huawei has pursued the right strategy. However, competition has grown fiercer. Domestic phone makers such as Coolpad are eyeing overseas expansion, and international players like Blackberry /quotes/zigman/18534/quotes/nls/rimm RIMM -12.01% ?and Nokia /quotes/zigman/162154/quotes/nls/nok NOK -2.85% ?are adjusting their strategies.
Huawei could start developing higher-end products, while strengthening its share in the low-end market. Meanwhile, the company, which mainly relies on telecom operators for phone sales, may also need to consider building its own sales and supply networks.
In addition, Huawei has also shown an interest in developing its own operating system because it now uses Android.
Read this report on Caixin Online.
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