Huawei: We’re STILL pondering over Firefox OS smartphone

Huawei will be 25 this year. Much of it, as a B2B player in the telecommunication market, has been spent in the shadows of data centres and warehouses where the Chinese company grew from being a sales agent for PBX switches to a global powerhouse that employs 140,000 and is expected to rake in £26 billion in revenues in 2013.

The company is looking to expand beyond its traditional remit and emulate the success of Taiwanese firm, HTC. Like the latter, Huawei has gradually morphed from being a diligent OEM for all major phone operators in the UK into a more aggressive device manufacturer.

Which is where Huawei Devices, the company's device division steps in. We recently chatted with Mr. Wang Yanmin, vice-president of mobile phone product line about the growing ambitions of the company and how it plans to transform its vision into a battle plan.

He started with one figure. Huawei Devices managed to ship 32 million smartphones in 2012; That represents a 60 per cent year-on-year increase and allowed the company to leapfrog most of the competition.

IDC reported towards the end of January that the company shipped a whopping 10.8 million smartphones in Q4 2012, that’s nearly twice the amount it shipped over the last period in 2011, at a time when it was debuting its Ideos range. This allowed the company to reach #3 behind Samsung and Apple and ahead of household names such as Sony, Motorola and LG.

Huawei is still small fish compared to Samsung and Apple, who both account for more than half of the global smartphone market, but its rate of growth is the fastest amongst the top five smartphone makers, so it is a force to be reckoned with. The Chinese company is also the fifth biggest mobile phone vendor with shipments growing 13.7 per cent (Q4 2012 vs Q4 2011).

Shipments of feature phones slipped to 20 million units, noted Huawei before adding that it is an industry-wide global shift brought along by operators. They try to migrate, on one hand, from feature phone to smartphone and from 2G to 3G in emerging markets and, on the other hand, from 3G to 4G in developed countries in mature territories.

Yanmin mentioned that the biggest challenge Huawei encountered, is trying to reach out its targeted audience, making sure its brand awareness process is done properly in all territories where it is active.

Huawei, he says, is historically an entreprise company and its original structure focused on suppliers and, as such, its approach catered less about the consumer market. Accordingly, when it established its consumer business, it morphed from an ODM to OEM which, in turn, meant that Huawei needed to improve its brand marketing.

Currently, most of the company’s revenues in handsets come from overseas markets rather than from mainland China. When it comes to more mature markets and products like smartphones, Huawei believes that it needs to capture the end user's heart and this, Yanmin added, will help to “develop more attractive products”.

And speaking of products, he said that although tablets belong to the home devices group, Huawei is one of the very few companies that can support its customers with a “total solution that spans across all the major platforms” and delivers a unified, synergistically coherent environment on different screens; that goes from home devices down to set top boxes.

Part of this strategy is underpinned by Huawei’s own cloud services. Currently, it is focusing on the Chinese territory where it supports a number of applications as well as content. Huawei Web Cloud, as it is called, will be available outside China but no time line was given. Yanmin simply stated that different regions have different requirements/specificities.

The time-to-market is likely to be reduced as Huawei teams up with local companies to support customers in the particular territories but he didn’t elaborate on that. Turning our focus to HTML5-based mobile platforms, Yanmin thinks it is a good opportunity for audiences in BRIC countries who require basic smartphones.

He added “We will obviously keep monitoring these technologies and platforms [and] we have a very close relationship with our partners to co-develop devices”.

That said, Huawei is being cautious with regards to Firefox OS. He confirmed, “Contrary to media reports, Huawei has not mentioned any Firefox OS smartphone. Still in discussion over the OS. It is ultimately all about supplying the best hardware and software for our customers.”

Huawei works very closely with Microsoft's Windows Phone team (formerly Windows Mobile). The Ascend W1 is its first Windows Phone 8 device and the only one that ships with the latest update to Windows Phone 8 out of the box (otherwise known as Windows Phone 8 Portico). Yanmin underlined the excellent relationship with Microsoft and said that they will work closer in order to bring more value devices to Huawei's customers.

However, at the moment, most of Huawei's devices are based on Android and arguably they're committing a lot of resources to that OS as well.

Moving on to hardware, Yanmin said that Huawei is one of the few companies who can produce its own chips for its smartphones. At the same time, he added, Huawei is a big consumer of chips as well with Huawei being the biggest Qualcomm customer in China when it comes to SoC and either number two or three worldwide (possibly after Samsung). He quipped that the Chinese company does think that it should build good relationship with chipset markets so are quite open to co-opetitors.

To sum up, Yanmin posited that 12 months ago, Huawei didn't have any branded smartphones and now all the major mobile phone operators in the UK - bar Three which only sells Huawei branded dongles - have one or more of its handsets in stock.

And as a reminder of where Huawei came from, relationships with the likes of O2 and Orange are quite well established as all of them were already Huawei customers, when the company was a player in the backend infrastructure.