Analysis by Patrick Avenell
SYDNEY, NSW: What do Apple, Samsung and HTC have in common? They’ve all transformed the mobile phone category by releasing true smartphones. Apple has the best ecosystem, Samsung the most lauded handset and HTC the best range. Aiming to emulate these three success stories is Huawei, which today launched its 2011 mobile communications range in Sydney.
In a bold declaration of Huawei’s ambition, Alex Huang, the director of the devices division, said the key to Huawei’s next stage of mining the Australian market was “transformation”. Globally, Huawei is determined to become a top five mobile phone supplier within the next two years, building on the reported 120 million Huawei phones sold since the creation of this part of the business.
The cornerstone to mobile phone success — carrier support — is central to Huawei’s plans. Of the three leading telcos, the Chinese company singled out Optus for special thanks. Huang also noted the support of Crazy John’s and Dick Smith Electronics for helping to establish a retail base for the consumer brand since launching last year.
Before launching its own consumer brand, Huawei was best known for manufacturing mobile communications hardware for Telstra and Hutchison. Neither of these telcos received the same thanks as Optus.
Strangely for a launch event that included so many different handsets on show — some with imaginative names like Boulder, Sonic, and Honour; and some decidedly less creative: U8150 and G6600 — none were truly launched.
We know the Ideos X1 will be out for RRP $99 (that was announced yesterday) and the Sonic is coming in July (though no carriers or pricing were announced), but all other unreleased handsets, such as the flagship Honour device, are left to the uncertain future.
With such grand plans promulgated and details scarce, the ‘how’ part of Huawei’s transformation to global significance is nebulous. They have a lot of handsets like HTC, but most are still running Android 2.2 (Froyo) and there appears to be less clamour and excitement for their release, especially when compared to the feverish anticipation that has been building towards the Sensation launch.
Like Apple, some of the Huawei handsets, mostly BlackBerry clones, were using a proprietary operating system. With established mobile phone behemoth Nokia struggling with its own OS, it is a stretch to think a less established player could ever successfully introduce a true rival to iOS, Android or even the BlackBerry OS.
All the available evidence points to a price based, high volume strategy to churn consumers through smartphones. The Ideos X1 is a perfect example: an almost impossible cheap handset that will appeal to aspirational though financially constrained consumers, and young people buying their first smartphone.
This will all be backed up by Huawei’s first above the line, consumer focused brand-based marketing drive. Huang said this will incorporate print, outdoor and digital. In an ominous declaration for an ensuing war at the low-to-middle end of the market, Huawei head of marketing Mark Treadwell said Huawei wanted to be associated with affordability.
“Huawei Australia's first ATL campaign, launching later this year, is not only a measure of our drive to become a household name in Australia synonymous for affordable innovation, but also our desire to invest in the brand and tell our own story,” said Treadwell in a statement. “With a heavyweight rich media online campaign supported by targeted outdoor at launch, combined with the creative direction, the campaign will talk directly to our core target market.”
With such determination to be seen as affordable, enormous marketing and ambitious sales targets, a successful transformation of Huawei will lead to a transformation of the whole smartphone category.