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 China's second-largest smartphone maker, already with more than $40
billion in annual revenue from a wide range of telecom gear and
products, is preparing to introduce Americans to several of its
smartphones and wearable devices this year, including its
youth-oriented "Honor" phone, Huawei officials told Reuters.
The company's 2015 U.S. plans, which have not been previously
reported, will encompass traditional advertising, online promotion
and sports team sponsorships, said Huawei's U.S. spokesman Bill
Plummer.
Huawei is changing its approach to marketing as it tries to shed its
image as a purveyor of cheap technology products - a common
perception issue for many Chinese companies. It's an important shift
for a company that for years had been single-mindedly focused on
engineering and relatively dismissive of consumer branding.
In December, it touted its new Honor 6 Plus phone on a billboard in
New York's Times Square. Plummer said that was "a sign of things to
come."
He declined to say how much Huawei will spend on its new marketing
campaign or what sports team, or teams, it had in mind. It already
sponsors London soccer club Arsenal, cricket teams in India and
rugby clubs in Australia.
NEW SMARTWATCH
At the Mobile World Congress over the weekend in Barcelona, Huawei
took the wraps off a smartwatch that will be sold in over 20
countries including the U.S.
Huawei now intends to appeal directly to consumers with several new
phone models, both low end and high end. It hopes to secure deals
with carriers, selling online through marketplaces, such as the one
operated by Amazon.com, and on its own fledgling gethuawei.com U.S.
direct-sales website.
It's unclear how open the carriers, who dominate U.S. sales, would
be to carrying phones from Huawei, a brand that remains unknown to
the majority of American smartphone users. Reviews of its high-end
phones, which can cost hundreds of dollars without a plan, have been
generally positive.
Still, the U.S. market is dominated by Apple Inc <AAPL.O> and
Samsung Electronics <005930.KS>. None of the four biggest U.S.
carriers - Verizon, AT&T, Sprint or T-Mobile - currently sell Huawei
phones on their websites and all declined to say whether they have
had talks with the Chinese company.
Huawei said in 2013 it would focus on other markets after its
products were labeled a national security risk in a U.S.
Congressional report, which said Beijing could use Huawei equipment
for spying. Huawei denied the report, but Chief Executive Ren
Zhengfei, who founded the company after leaving the Chinese
military, told reporters at the time he felt stuck in a U.S.-China
trade war.
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A White House-ordered review found no evidence of spying.
Lawmakers' concerns revolve primarily around Huawei's networking
equipment. And analysts say that a lack of brand recognition is a
bigger hurdle for Huawei's smartphone ambitions than pressures from
Washington.
Huawei currently has less than 1 percent of the U.S. market,
according to research firm IDC. But it can perhaps draw inspiration
from China's ZTE Corp <000063.SZ> <0763.HK>, which has gained 6.4
percent of the U.S. market by selling cheaper smartphones and
working with second-tier carriers like Boost Mobile, according to
Ramon Llamas, a research manager at IDC.
Online sales, particularly as no-contract plans that require
consumers to purchase a full-price phone gain in popularity,
represent perhaps the best option for Huawei, said Gartner analyst
C.K. Lu, adding that he sees it having a tough time signing
carriers.
“The U.S. market is tough for anybody except Apple and Samsung,”
said Lu.
Huawei's plan to broaden its U.S. offering is part of a campaign for
"normalizing" perceptions of Huawei in America and elsewhere, said
Plummer.
Though he declined to spell out what normalization entailed, most
public discussion of the company has centered around the debate of
whether its equipment allows China to spy on the United States, and
until now Huawei has kept a low profile.
Other Chinese companies still prefer that route: another major
Chinese handset maker, Xiaomi, has said it will take its first steps
onto U.S. soil without smartphones, choosing instead to sell
earphones and other accessories to test the market.
(Additional reporting by Malathi Nayak; Editing by Martin Howell)
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