Huawei & Smartphones Market

Huawei & Smartphone Market

Introduction

Huawei is a well known brand in the telecommunication industry primarily due to its low cost equipment and innovative technologies. Cisco was easily the market leader in the global network manufacturing market by mid 1990s. Cisco was involved in the selling of networking software, equipment and support services, making up to 60% of the Chinese market. However, it was soon to change with the introduction of Huawei in 1998. It started off by selling PBX telephone based products as well as other networking equipment. Soon, it left behind Cisco in the Chinese market due to its cost effectiveness achieved by process improvement. It was able to reduce its costs drastically and offer similarly spec networking equipment at 70% less price (Morehouse 2008, P4-5). This allowed the company to become a giant in the telecommunication infrastructure industry in the Chinese market allowing it to receive multi-billion dollar credit lines from the Chinese government itself.

This article discusses the plans of the Chinese telecommunication network manufacturer to become a top selling brand in the Smartphones market that is primarily dominated by Samsung, Apple and Sony. The author discusses the events of the Mobile World Congress 2013 as it was used a platform to showcase the five year plan of the company to deliver its drastic growth strategy in the Smartphone industry.

Discussion

The Chinese company Huawei was able to out run global networking giant Cisco due to its competitive edge in delivering low cost networking equipment. This is a part of the strategy of Huawei to achieve its long term goal of becoming the number one preference of the Smartphone buyers in the next five years. The worldwide Smartphone market saw an increase of 1.9% during the year 2012 in comparison to the fourth quarter during 2011. As many as 482 million cell phones were shipped by manufacturers during the year (IDC 2013). Moreover, with the introduction of faster internet connections like 4G along with faster Smartphones containing quad-core processors, the trend is likely to continue in the future. Smartphones have become a necessity as they enable people to stay connected to their loved ones no matter where they are on the globe. However, this presents a wonderful business opportunity for new entrants into this business like Huawei.

Huawei has been around the mobile phone industry for some time, primarily focusing its efforts on developing the telecommunication networks. It is currently the second largest solution provider and manufacturer in the information and communication technology (ICT) industry. It has vast experience in working for a number of telecom operators present in different areas of the globe. This has helped Huawei to gain valuable information and knowledge of the various key stakeholders of the industry. The company has had a legacy in reducing the cost of manufacturing process and intends to leverage that knowledge to gain a competitive edge in the Smartphone market (Morehouse 2008, P75). This is one of the key challenges that are being faced by the Smartphone ...