NewHuawei, mindful of profit margin, to exit markets where its smartphones can’t dominate
It’s taken Huawei Technologies more than two decades to step out of a swampy southern China village to produce one of every five smartphones sold on the planet. It’s even managed to unseat global brands like Apple Inc and Samsung Electronics in its home market of China.
Just when it’s poised to take on the global crown and stamp the Made-in-China brand across the world, Huawei said it will play down its presence to preserve its profitability, and may even consider pulling out of markets where its smartphones can’t take at least 10 per cent of the market share.
“Profitability is the bottom line for Huawei this year,” said Shao Yang, president of strategy marketing at Huawei’s consumer business group, in an interview with the South China Morning Post. “Our aim this year is to boost our sale of every single model of smartphones to between 8 million and up to 10 million handsets, from the previous average of 5 million units in the earlier models.”
As of the fourth quarter of 2016, Huawei sold 22.6 per cent of the world’s premium cellular phones -- those priced between US$500 and US$600 -- more than double its market share from the same quarter in 2015.
The key to Huawei’s success was its relationship with the world’s operators of fixed-line telephony, all of whom are customers of its stations and equipment. When it came time to selling smartphones, it was natural for Huawei to bundle its latest cell phones with carriers in 170 countries.
With the strategy, Huawei’s market share had surpassed 20 per cent of the smartphone sales in 22 countries, while occupying 15 per cent share in 33 markets as at the end of 2016, according to data by GFK.
