NEWS ANALYSIS: Huawei might be the world’s second-largest networking gear maker, but it has run up against huge barriers to entry into the U.S. market.
Huawei, the embattled China-based telecom equipment maker, is back in the news. But unlike the string of headlines that cast the company in a poor light over U.S. government fears that its networking gear might include back doors that enable cyber-spying, the latest news seems less sinister.
Huawei has announced that it will unveil its flagship smartphone, the Ascend P6
, in London. That device, Huawei said, will compete directly with Apple’s iPhone and Samsung’s Galaxy S4.
The trouble for Huawei has never been selling phones. As of this writing, the company has twice the market share of Apple in China and has been performing quite well in various parts of Asia. The trouble for Huawei has been appealing to Americans. For years now, it has tried to break into the U.S. market with several different technologies, but as its recent fight with U.S. lawmakers has shown, it’s a far more difficult task than expected.
U.S. suspicions about Huawei’s intentions means that it’s likely the Chinese telecom company will never be a big player in the U.S. mobile market. Here are the reasons why its chances could only get worse.
1. Lawmakers have attempted to discredit its intentions
Last year, Huawei said that it was hoping to increase its presence in the United States by launching smartphones and offering other telecom networking equipment to U.S. customers. But there was a problem: U.S lawmakers balked at the idea, saying that they didn’t trust that Huawei hadn’t designed its equipment to make it easier to spy on Americans and corporations. The lawmakers, alone, might prove to be too powerful for Huawei to ever make a splash in the United States.
2. Consumers would be wary
Even if Huawei managed to get is smartphone products onto store shelves in the United States, the chances are that consumers wouldn’t buy those devices because of concerns about security and Huawei’s corporate ethics. After watching U.S. lawmakers rake the Huawei name over the coals about security concerns, many consumers will likely find it hard to trust even their smartphone designs.
3. Enterprise customers would be even more concerned
Potential enterprise customers are already on their guard after the U.S. government served notice that it didn’t want to hear about major U.S. telecom companies installing Huawei’s equipment in their network. What makes anyone think that the corporate world
would respond favorably to Huawei entering the smartphone market? Enterprise users are notorious for their fears of spying and security and if the lawmakers were right, Huawei mobile devices would be one major threat.
4. No-names don’t succeed
Looking at the U.S. smartphone market, companies that haven’t established a big market presence or don’t have major brand names—such as Apple or Samsung—tend to fall by the wayside. LG, HTC and BlackBerry have somewhat respected names, and yet, they’re failing in the United States. How would a company named Huawei perform? Yeah. Not that well.