Smartphone Maker Huawei Halts Production of Windows Phones

Windows phones didn't bring in enough revenue and sales, so further Windows Phone devices have been dropped, according to a Huawei official.


While Chinese smartphone maker Huawei is not very well-known in the United States, it is a big name in other parts of the world, so when an official recently announced that Huawei is dropping production of Windows phones, the news was intriguing.

The company's ending of Windows Phone production and sales was unveiled by Joe Kelly, Huawei's head of international media affairs, during a late November press tour of its Shanghai research and development center, according to a report by The Seattle Times.

Huawei previously had been manufacturing two smartphones that ran on the Windows Phone mobile operating system, but the initiative did not produce adequate sales, Kelly told the Times. "We didn't make any money in Windows Phone," Kelly told the paper. "Nobody made any money in Windows Phone."

The company is now putting any plans for future Windows phones on hold, the story reported.

Huawei is the world's third-largest smartphone maker, behind Samsung and Apple, but it continues to be known mostly in its native country of China, according to a report by IDC.

Yet despite the Windows Phone sales failures, the company is still working to eventually convince a skeptical U.S. government that its products are not security risks or fodder for intellectual property theft concerns even though they come from China, The Seattle Times story reported.

Two analysts who spoke with eWEEK said they are not surprised that Huawei has ended Windows Phone initiatives at this point.

"I think what Huawei is really saying is that Windows Phone is not going to keep [the company] viable in the global market," Dan Maycock, an analyst with Transform, told eWEEK. "They see themselves in the position of supporting Android, which is what will help them be profitable quicker, especially in Asia. They want to capitalize on that."

To make Windows Phone devices profitable for the company in the long term, Huawei would have "to spend a lot of time and energy to make Windows Phone bigger for them," said Maycock. "This is them saying, 'We're going to instead try what already works,'" rather than try to continue to push an operating system that is not as popular in the market as Android and iOS.

That strategy could always be modified in the future if the market moves toward Windows phones, he said. "They could easily go back to it if things change. They are saying that they need to invest in what is hot right now."

The strategy makes sense for Huawei, said Maycock, because "going up against Samsung is hard enough" based on hardware and market reach without having to also battle over operating systems.

Charles King, the principal analyst with Pund-IT, told eWEEK that the Huawei move is very sensible for the company because "for the vast majority of handset makers, smartphones have become a volume play. You can't make a living on products where demand is nonexistent or merely lukewarm, like Windows phones."

Huawei's move is similar to the one taken in the past by BlackBerry—to drive innovation

in other areas to better compete in a crowded market where smartphone innovation seems to have peaked, said King. "Windows phones should be able to find a place in that strategy, since their value proposition is really aimed at businesses," he said. "But Huawei doesn't appear to believe that nurturing opportunity is worth the risks."

With a few exceptions, vendors always aim toward the markets that make them money. King explained. "They expose themselves to downside and risk if they see a potential upside within a time frame they can live with," he said. "It appears that for Huawei, the time for Windows phones has passed and the company is moving on to pursue other, more viable opportunities."

Microsoft did not immediately respond to a request from eWEEK for comments about the Huawei move.