Huawei plots to overtake Apple and Samsung

Huawei plots to overtake Apple and Samsung

From a company that wasn’t backed by all the power and funding that China has to offer, these vaulting ambitions would sound absurd. But when the claims come from Huawei they are well worth listening to.

Wan is shrewd, too. Asked if Huawei can really join Samsung and Apple in such a short time, his archness is apparent even through a translator: “I can’t predict who the other two will be.”

Now one year in to a five-year transformation strategy, Huawei’s aim is to turn away from the controversies that have mired it in accusations that its networks build spying capabilities into their hardware. Australia, the US and New Zealand, among others, have taken special measures to prevent Huawei from being part of government contracts.

Cold War powers have also been invoked to force US networks to reveal ever greater information to the state about Huawei’s involvement in their infrastructure. The fact that the business is headed by a former Red Army engineer, Ren Zhengfei, has not been helpful.

But, despite being called “a national security threat” by the US House Intelligence Committee, no concrete evidence of espionage has been uncovered.

Whatever the truth of the suspicions that swirl around the company, Huawei indisputably has a brand problem: if you want to take on Apple and Samsung, consumers need to know you’re not spying for China.

Last year, the company moved from a white-label giant, whose products were branded as made by others, to a consumer-facing business. The first flagship, the Ascend P1, has since sold more than a million units around the world in the past three months and has already been followed up with the P2. An “infinity screen” cascades over its edges and an interface called “Emotion” enhances Google’s ubiquitous Android software.

With the slogan “Make it possible”, Wan is first aiming at building his brand with top-tier phones, and then introducing more of that appeal to people “young or old, rich or poor”. He claims to “know that everybody has dreams and we can make them true”.

That sort of marketing hype is a part of what Huawei will need. Just a year ago, there were no devices with the Huawei brand on sale to consumers in the UK, while today the company is TalkTalk’s partner for its YouView boxes, and claims 10,000 are already in homes.

After an early partnership with Vodafone for a mid-range smartphone, now all of Britain’s mobile networks offer Huawei mobile phones. Reviewers have praised the hardware for offering decent features, but have not yet been overwhelming in their praise.

So what happens next? “Our philosophy is that, within any one price segment, Huawei’s the best one. And in the price segment of the iPhone, second half of this year, we have a new flagship, targeted at the higher end,” says Wan.

The Chinese giant’s aim to keep up the momentum – from zero to iPhone challenger in 18 months – is unprecedented. While Apple may not be quaking in its boots, it will be paying attention.

That’s in part because Huawei is able to do things that other companies simply can’t offer. That new Ascend P2 smartphone, for instance, claims to be the world’s fastest 4G phone.

For now it’s a theoretical maximum, because the speed of 4G networks is regulated by networks, rather than by manufacturers such as Huawei. But, because Huawei makes both sides of that equation, it was able to integrate compatibility that is unavailable to its rivals. Last year, it made the largest number of international patent applications in the world.

“Ours is the only one, the fastest 4G smartphone in the world,” emphasises Wan.

“Why can we have these kind of technologies? Because we come from the network side. When we develop our network side, we develop our chip set alongside it. No one else can do that; only Huawei can do that. Samsung can’t do that.

“And we have 10,000 research and development engineers developing radio technologies. Samsung has the technology of the display. Huawei has telecommunications.”

The company is also committed to spending 10pc of its revenue on research and development.

“The priority is to keep innovating from our experience on the network side,” Wan said. “We can make these smartphones with low power consumption and make the voice more clear and the video clearer, so that’s our differentiation.”

Wan also emphasises that, with 45,000 software engineers, Huawei is no slouch on what is likely to be a more important front in future years.

He says that, while products at the low end will vary from region to region, like Apple, Huawei wants a single flagship.

“The taste for smartphones is different around the world – the colours are different, the shape is different. But for the high-end models we want to have one example for the global market. For the middle tier and entry level it could be different for different regions. But for the high end it’s one. Beauty is universal.”

Panasonic’s attempts at doing something similar were, however, short lived, and Huawei may struggle to tune in to the needs of Western markets. “Panasonic was not very focused, 100pc, on the customers’ needs,” says Wan. “Huawei’s target is the ‘wow factor’ – it’s a love thing, a passion thing.”

The company is also not tying itself wholly to just Google’s operating system. As one of four initial vendors working on Microsoft’s Windows Phone, it has seen initial sales look positive, even if Wan accepts the new operating system may struggle.

“For us all the focus is on Android, but we will also try Windows. Right now, the sales are good, but it’s pretty hard to predict Windows Phone. For one OS [operating system] – Android – the consumers have spent time and their money to like it. We developed Windows 8 because we do believe some consumers will like it.”

That dabbling elsewhere, however, is not to be confused with a lack of focus on the job in hand. Huawei has powered its way to become the world’s third most popular smartphone vendor, even if its brand recognition lags far behind that.

Its deep pockets and enormous workforce are a large part of what has attracted so much controversy. With many countries sceptical, the need for a consumer-friendly brand has never been more crucial. And while an iPhone challenger might sound impossible, there’s plenty to suggest Huawei will make a massive dent in its competitors’ market share.

“We think Huawei’s pretty famous with business customers and network operators,” says Wan.

“The challenges and the big opportunity is in the consumers. Right now, Samsung and Apple are the top two. But all the others are a good opportunity for us. We’re one year in to a transformation. We are on the way to being a top-three consumer brand. We defined strategy and we are on the right way.”

Huawei needs consumers to be as passionate about buying its products as the company is about selling them. That’s a long way away. But, by some measures, it already has the products to challenge its rivals. If marketing is the only big problem, then few would count out Huawei. That is likely to make the sceptics more paranoid than ever.

Wan Biao CV

Born 1972

Education University of Science and Technology, China

Career 1996 Joined Huawei as a research and development engineer; 2001 President of Huawei’s UMTS Network; 2010 CEO, Huawei Device

Not a lot of people know that… Wan relaxes by reading history books

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