Huawei seen tapping AT&T to sell flagship model in US amid slowing sales growth

China’s largest smartphone maker is making another attempt at cracking the US market, at a time when its sales growth is slowing, with the US carrier’s help

PUBLISHED : Friday, 29 December, 2017, 10:01am
UPDATED : Wednesday, 10 January, 2018, 11:12am

Huawei Technologies, the world’s largest telecommunications equipment supplier, plans to team up with mobile carrier AT&T for the release of its flagship smartphone model in the United States this February.

The Shenzhen-based company has said it will enter the US market next year and will unveil its plans at the CES trade show in Las Vegas in January, according to The Information. Huawei declined to comment on the choice of its US partner.

Partnering with an established telecommunication carrier is crucial to Huawei’s plans to woo US consumers because most smartphone sales are tied to post-paid contracts. The foray into the US will take place amid slowing sales growth, as Huawei battles to gain market share among buyers of more expensive smartphones.

Revenue probably rose 15 per cent to 600 billion yuan (US$92 billion) in 2017, down from 2016 when sales jumped 32 per cent, according to a letter to staff by Huawei’s rotating chief executive Ken Hu on Friday.

Privately-held Huawei estimated that it has shipped a total of 153 million smartphones under the Huawei and Honor brands in 2017, up 9.8 per cent from 139.3 million units in 2016.

In October, the company launched its new flagship Mate 10 smartphone in Munich, Germany.

Richard Yu Chengdong, the chief executive of the company’s mobile business group, told reporters that he expected the Mate series to surpass Apple’s iPhone 8 because of its longer battery life, faster charging speed and better photography.

Comparison: Apple iPhone X vs Huawei Mate 10 Pro

The US is a major market for any aspiring global smartphone supplier because its consumers spend more on mobile phones, and success there burnishes the brand’s image, according to analysts from Cyzone and IDC Asia-Pacific.

A successful debut in the US would represent a major comeback for Huawei after a House of Representatives intelligence committee report in October 2012 said the company and ZTE Corp posed as threats to national security because of their ties to the Chinese government. It would also validate Huawei’s strategy of making high-end phones priced above US$500 to compete with the likes of Apple’s iPhone X and the Galaxy Note 8 from Samsung Electronics.

While Huawei leads sales in China, the world’s largest smartphone market, the company trails both Samsung and Apple in global mobile handset sales.

Apple still leads the global pack in terms of earning the most profit from each smartphone sold.

Apple’s profits also far exceeded that of its nearest competitors, with the company able to reap an average of US$151 from each iPhone sold, compared with US$31 for Samsung and between US$13 and US$15 for Huawei and rival Chinese brands Oppo and Vivo.

To ensure it keeps up in the technology race, Huawei this month forged an alliance with Baidu to work on artificial intelligence-powered devices.