Huawei powers ahead with strong R&D focus

By Gao Yuan (China Daily) Updated: 2015-04-11 10:55

After overtaking Ericsson in 2013, the sales volume of Huawei is now on par with that of the United States-based Cisco Systems Inc. China and other emerging markets' booming demand for 4G networks will greatly lift Huawei's presence in the 4G telecom equipment market, according to a report from research firm International Data Corp.

The US is the only major market that Huawei has failed to penetrate. Regulators there have blocked the Chinese company from telecom infrastructure construction projects, citing concerns over information security. The company has said that its products are safe and the technologies are transparent.

Industry insiders blame the setback for the worsening Sino-US relations in information security. They believe it is more of a political matter.

Huawei is taking advantage of its relationship with carriers to launch smartphones. In the past year, its flagship handset, Mate 7, was even in short supply at points amid huge demand. That is quite an achievement for Huawei, given the tough competition in Chinese smartphone market.

Huawei was the third-largest smartphone vendor in China by shipments as of the end of 2014, according to IDC. Its 11 percent market share only lags those of Xiaomi Corp and Apple Inc.

It has ambitious goals in the consumer electronics sector. In March, the company unveiled its first smartwatch, taking on the Apple Watch. It also aims for a bigger presence in developed markets where profit margins could be higher.

Wang Jingwen, a researcher at Canalys China, said that Huawei has shipped more products in Western European markets such as Spain and Germany than other Chinese brands, including ZTE Corp and Lenovo Group Ltd.

But entering other developed markets will not be easy.

"In developed markets, (Chinese) vendors will find it even harder to build brand awareness as well as bring higher-end products," Wang said. "Most consumers already use smartphones from the big players such as Apple and Samsung Electronics Co Ltd. The operators usually set higher standards for smartphone products."