Chinese smartphone maker Huawei will take a new approach to selling its handsets in the United States in 2018 by marketing them for the first time through some U.S. mobile carriers.
Specifics for the deal have not been announced, but the development was revealed by a Huawei executive who said he will provide more details about the arrangements at January’s Consumer Electronics Show in Las Vegas.
“We will sell our flagship phone, our product, in the U.S. market through carriers next year,” Richard Yu, the president of Huawei Technologies’ consumer business, said in an interview which was confirmed by a Huawei spokesperson. “I think that we can bring value to the carriers and to consumers. Better product, better innovation, better user experience.”
Huawei is the world’s third-largest producer of smartphones, behind Samsung and Apple. The move could help Huawei increase its market share in the U.S.
In the recent past, Huawei has only sold its handsets in the U.S. through its own website, through Amazon.com and some other online retailers, giving its phones less market exposure and making it impossible for buyers to examine and try out the devices before making a purchase.
That placed Huawei’s smartphones at a considerable disadvantage to Apple, Samsung and other phone makers whose products are readily available in mobile service carriers.
In addition, for many consumers it can be simpler to buy their smartphones directly from their mobile carriers where the handsets can be set up with a SIM card, data transfer services and related services that can make it easier to switch to a new phone brand.
Yu gave no other details on when Huawei handsets will be available from U.S. carriers and he did not mention which carriers might sell company’s phones in the future. He did say that the first phone to be offered through U.S. carriers will be the flagship Huawei Mate 10, which was introduced by the company in October 2017. The company offers three models of the Mate 10.
Several IT analysts say the move, while intriguing, won’t necessarily assure Huawei’s success in selling more of its smartphones in the U.S.
“Huawei has long tried to sell its phones directly to consumers, but that distribution model breaks down in the U.S.,” Avi Greengart, a mobile analyst with GlobalData, told eWEEK. “Getting its phones on carrier shelves is a prerequisite to volume sales in the U.S., but it is not a guarantee.”
While Huawei’s phones have been improving, its software is “still too heavy-handed for U.S. consumers and its brand is virtually unknown,” said Greengart. “Apple and Samsung dominate the premium smartphone market both because they have strong brands that they continually invest in, and because they have superb products with unique differentiation.
Greengart said that while there is more room at the entry level, “Huawei has plenty of competition from other Chinese brands that are now entrenched with carriers,” including ZTE, TCL (Alcatel) and Lenovo (Motorola). Inexpensive phones from Samsung and LG also offer stiff competition, he said.
Patrick Moorhead, principal analyst at Moor Insights & Strategy, said Huawei’s sales in the U.S. through Amazon and other websites “never made a dent in sales” in the recent past because to succeed in the U.S., smartphone makers must align with carriers to rack up successful numbers.
That’s Huawei’s plan now, he said, but the company still has a few challenges in the U.S. with those plans. The main issues are “a lack of awareness and familiarity [from consumers], which will take years to build.” There are also concerns about the quality of Huawei cellular modems, “which were never fully certified through carriers,” said Moorhead.
Charles King, principal analyst at Pund-IT, told eWEEK that it’s “natural that [Huawei] would want to enter the U.S. market under their own marquee. Plus, their success as a partner of cellular carriers should lend them credence—this isn’t a nobody trying to make a splash.”
On the other hand, “it will be interesting to see how competitors respond,” said King. “If you hear rumors about the company’s supposed security issues [because they are a Chinese smartphone maker], you can bet that somebody’s nervous about their competitive strengths.”
Another analyst, Rob Enderle of Enderle Group, said he’s not as certain that Huawei will make its sell-through-the-carriers strategy work. Japanese and Korean car companies who came to sell their products in the U.S. learned they needed a domestic presence here with full marketing and design support to ensure their ultimate sales success, said Enderle.
“The Chinese vendors, except for Lenovo, have been slow to learn the Japanese and Korean lesson,” he said. “Japanese and Korean cars didn’t take off until they got that right.”
For Huawei, the company “seems to be only addressing the distribution side of this and while you can buy into distribution you still need to pull product through the stores,” said Enderle. “Right now, that element is missing from this [announcement], suggesting it will fail in market.”