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Smartphones

Spurned by US carriers, Huawei sets world’s lowest price for its unlocked flagship smartphone

Telecommunications equipment maker Huawei has signed up a group of major US electronics retailers to distribute and promote its Mate 10 Pro Android model in the world’s third-largest smartphone market

PUBLISHED : Monday, 05 February, 2018, 7:27pm
UPDATED : Tuesday, 06 February, 2018, 9:43am

Huawei Technologies, China’s largest smartphone supplier, is now offering an unlocked version of its flagship Mate 10 Pro model for pre-orders with a steep discount and some incentives to US consumers, following the company’s failed bid to establish distribution through a major American mobile network operator.

The Mate 10 Pro’s US$799.99 price tag makes it 20 per cent cheaper to buy in the US than either in Europe, where it costs 799 (US$995), or in China, where it sells for 5,399 yuan (US$856).

US pre-orders, which run from February 5 to 17, come with a US$150 gift card from retailers, making the Mate 10 Pro’s effective purchase price at about US$650 – the lowest it is available globally.

That promotion may help bolster the Huawei flagship Android model’s appeal to US consumers when compared against Apple’s iPhone X, which is priced from US$999, in the world’s third-largest smartphone market after China and India.

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In a statement on Monday, Huawei said US pre-orders for its Mate 10 Pro are available in-store and online at major electronics retailers including Amazon, BestBuy, Microsoft, Newegg and B&H. The Mate 10 Pro will start shipping to US customers from February 18.

In addition, Huawei has started US pre-orders for its most expensive smartphone model to date – the Mate 10 Porsche Design edition, which is priced at US$1,255. Supply of this model is scarce in China, where consumers must pay 1,000 yuan or more on top of its 8,999 yuan list price. 

The Shenzhen-based company’s push into the US smartphone market will be driven by those third-party distributors amid its recent failure to secure a distribution deal with one of the country’s major mobile network operators, which corner about 90 per cent of all smartphone sales stateside.

Huawei, which is also the world’s largest telecommunications equipment supplier, suffered a setback to its US expansion plans in January when AT&T walked away from a smartphone distribution pact with the privately held Chinese firm because of US security concerns

The US government remains concerned about Huawei’s ties with the Chinese government, an issue that has blocked both the company and Hong Kong-listed ZTE Corp from selling network equipment to major US telecommunications carriers.

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The same security worries were reportedly also the reason behind the recent decision of Verizon Communications to abandon plans to distribute Huawei’s smartphones in the US. Both Huawei and Verizon have declined to comment. 

In light of its difficulties with forging distribution with a US carrier, Huawei may also need to be more generous with its promotions.

Wang Xiaofeng, a senior analyst at Forrester Research, said Huawei’s US$150 gift card promotion was insufficient to convince many US consumers to make the switch to a Chinese brand because these buyers typically bought their smartphones through instalment plans with carriers.

“In a market dominated by iPhones, Huawei should offer more incentives to encourage consumers to try its phones first,” said Wang. “The US$150 gift offer is not attractive enough because it will only be applied to a future purchase.”

In a market dominated by iPhones, Huawei should offer more incentives to encourage consumers to try its phones first.
Wang Xiaofeng, senior analyst at Forrester Research

Huawei was ranked as the world’s third-biggest smartphone brand in the fourth quarter of last year, with total shipments of 41 million units and a 9.9 per cent market share, according to the latest estimates from research firm Counterpoint. 

Apple, with shipments of 77.3 million iPhones and an 18.6 market share, had unseated Samsung Electronics as the world’s top smartphone supplier during that quarter. Samsung shipped 74.4 million smartphones for a 17.9 per cent global market share in the same period.