Huawei tries to conquer U.S. market

06/02/2018

Huawei has had difficulty in the United States market, seeing that AT&T – a distribution mark – walked away from a smartphone distribution pact with the privately held Chinese firm because of US security concerns. Therefore, Huawei has decided to study a new business plan to conquer the US market.

The first decision of Huawei Technologies was to apply large discounts on the flagship smartphone through  pre-orders and some incentives to US consumers. US pre-orders, which run from February 5 to 17, come with a US$150 gift card from retailers, making the Mate 10 Pro’s effective purchase price at about US$650 – the lowest globally. Pre-orders are available in-store and online at major electronics retailers including Amazon, BestBuy, Microsoft, Newegg and B&H. The Mate 10 Pro will start shipping to US customers from February 18.

The choice to apply large discounts on pre-orders is in line with Huawei’s strategy to circumvent the refusal of the largest US distributor. Since now the Shenzhen-based company’s push into the US smartphone market will be driven by third-party distributors.

But the difficulties in the US market still remain. Indeed the US government remains concerned about Huawei’s ties with the Chinese government e complicates many financial operations in the name of security. For example Hong Kong-listed ZTE Corp has been blocked from selling network equipment to major US telecommunications carriers; and Verizon Communications has abandoned the plan to distribute Huawei’s smartphones in the US.

Wang Xiaofeng, a senior analyst at Forrester Research, says that Huawei’s efforts are not enough to conquer the US market; since Americans have a different purchase culture than the Chinese one. “In a market dominated by iPhones, Huawei should offer more incentives to encourage consumers to try its phones first,” said Wang. “The US$150 gift offer is not attractive enough because it will only be applied to a future purchase.” Americans typically bought their smartphones through instalment plans with carriers.

For Huawei the road to conquering the world market is still long. The data for the fourth quarter of last year – according to Counterpoint – saw Huawei as the third smartphone brand in the world, with total shipments of 41 million units and a 9.9 per cent market share. Apple and Samsung have respectively 18,6 and 17,9 percent of the market.

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