Chinese manufacturer intends to rise above Apple and even Samsung in the market; Flagship Ascend P7 to spearhead growth strategy as brand awareness soars in four years
Huawei has issued a clear warning to market leaders Samsung and Apple, insisting it will not settle for third in the smartphone rankings.
The intentions of the Chinese manufacturer were made known by its chief executive of consumer business Richard Yu this month during the launch of its new flagship device, the Ascend P7, held in Paris.
Yu told the 600 invited guests at the Maison de la Mutualite venue: “We are now ranked number three for smartphone shipments in the world. Our target is not number three. We want to become better and better and better.”
Huawei sold more than 52 million handsets in 2013, becoming the third biggest (4.9 per cent) manufacturer of smartphones globally for the first time – overtaking LG.*
The achievement comes a year ahead of the firm’s original ambitions – revealed by Huawei executive vice president Mark Mitchinson in 2011.
Internal targets have been set to push handset sales past the 80 million mark this year – closing the gap on Samsung (31.3 per cent) and Apple (15.3 per cent).
The rise in sales, which includes four million Ascend P6 handsets – one of its biggest sellers – has culminated in a significant rise in brand awareness for the firm, which prior to 2010 was essentially an unknown in the handset space.
Yu revealed global awareness of Huawei more than doubled to 52 per cent last year – with handsets available in 100-plus markets. Sales targets of the Ascend P7 (pictured), available from June are understood to be in excess of 10 million.
In the UK, awareness increased significantly last year, from 12 per cent to 36 per cent, with an internal figure of more than 60 per cent set for this year.
Huawei currently has a market share of around two per cent in the UK – treble that of 2012.
Huawei chief marketing officer device department Western Europe Andrew Connell told Mobile News in Paris the ambition is to increase its UK market share by around two to three per cent every year – but declined to name where that share it likely to come from.
According to figures from Kantar Worldpanel Comtech (based on sales between December and February), Apple held 32.1 per cent of the UK market, Samsung 30.2 per cent, Sony 8.9 per cent, Motorola 5.9 per cent, HTC 4.0 per cent and LG 3.2 per cent.
“We are a year ahead of schedule and for the third quarter on the trot we have been the third biggest vendor – so we are now consistent.
“We are clearly not a company which is accepting its current position in the market. We have taken this number three position globally and we absolutely want to consolidate that. There is a very big gap between three and two, so not only do we want to consolidate our position, we want to be taking a couple of percentage gains each year, and build the business very steadily – then we will be very happy and comfortable in the way we are progressing.”
Huawei’s exposure in the UK has been aided heavily through sponsorships of the ice rinks in the Shepherds Bush and Stratford Westfield shopping centres over Christmas. Also last year it sponsored the London World Triathlon Championships – and will again this year – which attracted more than 300,000 people and a TV audience of 3.6 million.
It has also seen huge traction from placing marketing messages at cinemas to hits on its website and via YouTube. The G6 product video launched at MWC has 1.6 million YouTube views so far.
However, a key role in Huawei’s ambitions, both in terms of sales and brand recognition and on a local and global basis, centres around the popularity of football.
The firm has made “significant investments” in becoming an official brand partner to some of the biggest football clubs and leagues across Europe, exposing its brand both locally and globally through broadcasting. Clubs already signed up include Arsenal, AC Milan, Borussia Dortmund, La Liga (the Spanish league), and most recently Paris St Germain.
The deals provide significant brand presence during match days, with the firm’s messages displayed around the pitch and in front of TV cameras as well as in the match day programme.
Whilst the impact from Arsenal (signed in January) and Paris St Germain (signed last month) remains in its infancy, Nellman claims Huawei has seen “enormous” success in countries such as Spain and Germany, where its market share is now hovering around 10 per cent.
“We are stepping up our marketing,” said Andrew Connell. “Do we feel we have failed so far? Absolutely not. Do we feel we can do more? Absolutely yes. Our brand needed to be better known and last year was a very big year for us and we saw the global figures go up. In the UK our brand awareness increased from 12 per cent to 36 per cent, but in the markets we invested in early, such as Spain, our awareness lifted by around 360 per cent.
He continued: “This is a market where there have been probably five or 10 leaders in the past 10 years – so no one owns a share, and that’s a really important factor here. We are still a young company and we are striving to do things better all the time and we are very comfortable in being a challenger, so we will take a bit more risk and do things differently.
“Huawei does things slightly more cautiously in the marketing side and sees what works before replicating it. Football became very quickly and very clearly a successful way for us to get our brand better known.
“We’ve invested heavily with Arsenal. It’s a prestigious club, and we are now visible around the club and have links on their social network sites in to ours.
“The deal is really helping us, and the reaction from retailers has been really positive in recognising this is a major investment and what we are doing.
“There is a football focus, but there is room to do other things. We are now inundated with large sponsorship proposals every single week, but we are going to remain focused on football and do things well in one sport certainly for the foreseeable future.
“One thing which unites all those clubs is they have an interest in promoting themselves in the Far East and China and there is a great two-way relationship on how we do that.”
Huawei product director UK and Ireland James Powell added: “We are active in our marketing. Making an investment in something like an Arsenal, is significant, because we understand the relationship between brand and how that affects our trade relationships and how it affects our consumer relationships. This is a critical year and we are underpinning it with those kind of big investments. They are a long-term partner but they were not the only ones in the offing. There were a number of major clubs we were in discussions with. The deal with Arsenal is for two and half years. There’s a huge interest in China.”
But it’s not all about external advertising. Connell claims Huawei as a brand – and its abilities in building “high quality”, high-specced handsets, and its history in network build – has begun to bare fruit amongst its reseller partners.
Huawei handsets can now be found in a number of major retailers, including Phones 4u, O2 and Carphone Warehouse, and claims partnerships and conversations are strengthening.
Powell high- lighted the firm’s relationship with Carphone Warehouse, which marketed its Y300 prepay handset as “the best smartphone you’ve never heard of”, placing it alongside comparable-specced devices.
He claims this message was one decided by Carphone Warehouse, and the knock-on effect of this saw the handset become the second best selling prepay device (Moto G understood to be top) over the Christmas period.
“We’ve got the ability to bring great value to the market, something our partners can see,” said Powell. “The engineering quality and the design is also there. We just happen to win on price, which is a great position for us.
Connell added: “These guys [retailers] don’t shift their allegiances overnight. There are some people who are real visionaries, there are some buyers who are very open minded and there are some that are very cautious. We have to be very respectful of these reasons, and you can’t push them to change, but there is definitely a momentum right now.”
The Huawei Ascend P7 will launch in 30 markets from the first week of June, including the UK and most European countries. Details on resellers were not known at the time of going to press.