According to foreign media reports, Yu Chengdong, president of Huawei's consumer business, officially stated that Huawei, the Chinese smart phone brand, will start selling through US operators next year in an effort to seek cooperation with Samsung and Apple in the US market. competition.
Bloomberg reported that Chinese mobile phone companies including Huawei and Xiaomi are negotiating with US wireless operators including AT&T and Verizon on selling their flagship smart phones.
Although Xiaomi and Huawei are currently selling mobile phone products through the e-commerce channel in the Chinese market, they have achieved great success. However, in terms of marketing or market financing, cooperation with wireless carriers will undoubtedly have a large-scale expansion. More significant significance.
Yu Chengdong, president of Huawei’s consumer business, revealed in an interview that in 2018, the first model to be launched in the US market would be Huawei’s flagship mobile phone Mate 10, but he did not disclose the selling price and which operator it specifically worked with. Yu Chengdong said that details will be released at the CES show in Las Vegas next month.
In fact, Huawei has already sold some models of mobile phones in U.S. electronics stores and online, but it has a small share in the U.S. market, because in the U.S., most mobile phones are still sold through mobile operators. Globally, Huawei lags behind Samsung and Apple in the shipment of mobile phones, but it is the largest market in China and expects shipments to reach 150 million units this year.
Yu Chengdong also said in an interview: “We will sell our flagship mobile phones through operators next year. I think we can bring value to operators and consumers, including better products, better innovation, and better user experience."
Yu Chengdong expressed his belief that the smart phone business will not be affected by the U.S. government. The U.S. government always believes that Huawei may be a security threat. After the U.S. government took Huawei's network device security, he said. Yu Chengdong said: "After selling Huawei's terminal equipment to consumers, they will change their minds when people really start using Huawei products. Huawei has always denied that it is a security threat. They always reject US complaints and believe that the United States is so Worry about Huawei's products is politically motivated, or it may be that competitors try to drive them out of the market.
Yu Chengdong also said: "We are already the world's third-largest smartphone manufacturer, and it is close to the second. He believes that Huawei may soon become the second largest manufacturer." In addition to sales in the United States, Huawei is also ready to operate next year Businesses sell mobile phones in Japan.
According to Huawei's own public report, in the first half of 2017, the company achieved sales revenue of RMB 283.1 billion, an increase of 15% year-on-year; operating profit margin was 11%. Huawei has not been listed and its property rights are owned by its employees. Huawei has regularly disclosed its financial results. Foreign media believes that this move can ease the security concerns of the United States and Europe.
Huawei's current development momentum is very fierce. Due to its strong position in China, India, and other developing markets, sales of its high-end Huawei and mid-range glory smart phone brands are growing faster than Samsung and Apple. This prompted Huawei to exercise the courage to challenge its US competitors. According to IDC's statistics, in the latest quarter, Huawei’s mobile phone shipments increased by 16.1% from the same period last year to 39.1 million units, which is a much higher growth rate than Apple and Samsung. Among them, Apple's sales reached 46.7 million, an increase of 2.6%. Samsung's sales reached 83.3 million units, an increase of 9.5%.
Huawei launched its high-end mobile phone Mate 10 in October. This phone costs nearly 15% to 30% lower than Apple and Samsung, but it also has high-end displays, excellent cameras and other advanced features.
Yu Chengdong stated that Huawei is not a company that provides cheap, low-cost mobile phones, and its advantage lies in the high-end market. Huawei hopes to rely on the performance of mobile phones in the U.S. market instead of relying on price wars.
Chinese manufacturers like Huawei have opportunities in the United States
Forbes believes that more and more Chinese manufacturers that introduce high-end products and cost-effective products will enter the United States, which will put enormous pressure on Apple's sales in the United States market. Apple currently accounts for about 30% of the US market sales.
The reason that the US market has attracted the attention of global smartphone manufacturers is that although the United States is not the largest smartphone market by number, it is definitely one of the most lucrative markets in terms of revenue and profit. For example, the average selling price of smart phones in North America in 2017 is expected to be 567 US dollars, compared with only 215 US dollars in the Asia-Pacific region.
Although wireless operators still dominate in the United States, there have been some changes in the US wireless market in recent years.
On the one hand, U.S. operators have been subsidizing expensive iPhones such as Apple in the past, reducing the prepayment price of customers. However, these subsidies or discounts have now been cancelled because the operators have begun to turn to installment payments, which will spread the cost of purchases over two years. For example, the price of flagship phones such as Samsung and Apple, which currently dominate the US market, are all close to 1,000 US dollars (such as the Apple iPhone X and Samsung Note 8), and the monthly instalment plan costs about 42 US dollars. /month. As a result, many Chinese smart phone manufacturers have an opportunity because many users want to buy low-priced smart phones and purchase products themselves.
On the other hand, the monthly consumption of mobile phone users in the United States is declining, and the data shows that the average consumption of U.S. users has dropped by 9% in November, which has brought greater promotional pressure to U.S. wireless operators. The price of smart phones provided by China is lower, which is very attractive to operators and can provide more favorable promotions to attract customers.
Chinese mobile phone manufacturers face challenges
Forbes believes that the reason why Chinese mobile phone manufacturers can succeed in the Chinese market is because Apple's current ecosystem in China is not strong, and the constraints in this regard are relatively small. First, the price of smart phones in China is even lower, and Chinese smartphone users spend 60% of their time on applications such as WeChat, Weibo, or Baidu that are completely unrelated to the Apple ecosystem. This destroys Apple's ecosystem.
According to IDC's report, in the third quarter of 2017, Apple accounted for only about 8% of the Chinese smartphone market, and the total of Huawei and Xiaomi reached about 33%. However, in the United States, Apple’s ecosystem may be more powerful and all US digital services can be used and widely used.
In addition, the brand image of Chinese companies is not strong. First of all, regardless of whether Huawei admits or not, the U.S. government always takes Huawei’s security issues at a glance. Huawei and other brands have been banned from U.S. telecommunications infrastructure business due to security concerns, which is bound to hinder their smart phones and other consumer devices. image of.
Moreover, despite the growing ambitions of companies such as Huawei, the intellectual property rights of these companies are also relatively weak. Although Chinese companies like Xiaomi are increasing their patent portfolio, Forbes believes that many of these patents are limited to the Chinese market where intellectual property laws are not so strong. This may put these companies in a weak position when entering the US market.
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