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Revolutionary plan for long-term dominance

Michael Garwood
May 21, 2012

Chinese manufacturer Huawei says B2B channel is the last piece in its global battle plan

Huawei gathered the UK’s leading dealers and distributors last week to give them a simple message: “The Huawei revolution starts now.”

The statement of intent came from Huawei device UK and Ireland VP Mark Mitchinson (pictured), who described the B2B channel as the last piece in the Chinese firm’s puzzle – as its ambitions to become one of the world’s leading handset manufacturers continue to gather pace.

“We are serious about this business,” said Mitchinson. “We are not here for the short term. We have employed some of the best people in the industry and are building the best team in manufacturing.”

Around 40 dealers, and both Huawei distribution partners Data Select and 20:20 Mobile, were treated to a day of racing at Silverstone race track, before getting down to business.

Mitchinson, alongside Huawei device UK and Ireland product director James Powell and Huawei device UK and Ireland marketing director Jill Styring, took to the stage to discuss the company’s plans.

These include it becoming a top five original equipment manufacturer (OEM) within three years and a top three OEM within five years. No easy task, particularly as Huawei is still considered a relative unknown in the marketplace.

The trio began the event by reeling off numerous facts and figures to remove any potential doubt Huawei is ‘just another’ company from China.

And Huawei is no small company. It has a long history of success in the telecoms industry and is split into three areas: infrastructure, enterprise and devices.

It has been building networks for more than 20 years, serving around a third of the global population by working with 46 of the top 50 operators in 140 countries worldwide.

The firm is the number one manufacturer of mobile broadband dongles worldwide and has been building white-label devices for partners such as the Vodafone Group for years.

Its handset sales have increased from six million in 2007 to more than 34 million last year. It expects sales to top 55 million by the end of 2012, with around 20 million of those smartphones (both OEM and ODM) representing a 471 per cent rise year on year.

In 2011, the company had a turnover of around $32.4 billion and shipped more than 150 million units. It expects turnover to top $38.7 billion this year, with total unit sales set to pass the 200 million mark.

Mitchinson said: “No other manufacturer has that level of success across so many different devices.

“Until a year ago we were the world’s best kept secret. But we have put ourselves on the map and in the spotlight.

“The biggest challenge for us now is around the brand piece, which is really important for us.

“From a visionary perspective we are looking to be a top three smartphone brand by 2015, and that’s achievable.

“We know it’s going to be difficult, we know certain manufacturers are upping their game.

“But I’ve been in the industry for 23 years, working with manufacturers, retailers and distribution companies, and the whole thing moves – it’s very cyclical.  And it’s really important that there is a fresh approach to the market.”

That approach, says Mitchinson, has sent a ripple of “fear” through its rivals – the manufacturer has launched a number of “breakthrough” technologies over the past six months.

This roll-out began in January, at CES in Las Vegas, with the launch of the P1 smartphone, billed as the world’s slimmest handset.

In February, during the Mobile World Congress in Barcelona, Huawei unveiled the Ascend D Quad, which it called the world’s fastest device and which uses its own chipset (see report below).

Resources for future technologies and developments at Huawei are substantial – with 45 per cent of the firm’s 140,000 workforce working in its research and development team.

Huawei commits around 10 per cent of all sales revenue to the department also.

And it is for this reason Mitchinson believes Huawei can  break into the handset market  and upset the traditional mould.

Mitchinson said: “A year ago we were an unknown brand and now we have products which are the world’s fastest and world’s slimmest. It’s a big shout for us.

“We have got to be market-driven; it’s not about following the market for us. We have pulled away from being just one of the Chinese companies out there.

“We know certain manufacturers are talking to our distributors and are quite serious about keeping us at bay – because they see what a threat we can and will be. So we are now being feared.

“We are here to stay. We achieved seven per cent share last year for Android shipments, so we’ve already made progress. A year ago that would have been zero, so we have begun to establish ourselves.”

Powell, who spent 11 years working for Samsung during Mitchinson’s reign, said Huawei is investing heavily in gaining the correct information to build and design products suited to its market.

He said: “We can’t afford to make mistakes. We need to hit the market with products that are going to work from the start.

“We haven’t got a road map that sees us throw many different things out there to see what sticks. That’s not what we are about.”

Progress continues to be made, claims Mitchinson, who has openly described the past 12 months as the “biggest” and most “exciting challenge” in his 23-year career.

Huawei now has relationships with some of the leading high street retailers and operators, including Phones 4U and Vodafone, to stock its first wave of devices, including the Blaze and G300.

Full report in Mobile News issue 513 (May 7, 2012).

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