MWC 2014: Huawei, LG announce smartphone strategy

Smartphone shop in Europe

At the Mobile World Congress (MWC) 2014, Asian device vendors Huawei and LG today said they hope to sell more smartphones in a bid to increase market share against Samsung and Apple.

Huawei and LG have smartphone market share of around 5 percent in 2013. It will become tough to compete with Lenovo, which is buying Motorola Mobility, to become the number third in smartphone market share chart and to expand in American and European markets.

Reuters reported that China’s Huawei Technologies believes it can take advantage of recent changes in how operators in the United States sell phones to get a foothold in the all-important market.

LG Electronics Inc aims to broaden its range of smartphones so sales this year grow at double the rate of the market, as the South Korean company seeks to retake the position of world’s third-biggest maker.

Huawei

Recently, IDC said that Huawei maintained its number three position worldwide, attained the highest year-on-year increase among the leading vendors, and raised its brand profile with a higher proportion of self-branded units compared to the ODM work it had done for other companies.

Huawei earlier said 52 million smartphone units were shipped in 2013, more than a 60 percent year-on-year increase from 2012 with a total sales revenue increase of 18 percent to US$9 billion for the year. To date, it has launched its products in over 140 markets via more than 600 channel vendors globally, resulting in its smartphone business reaching more than 80 percent of retail markets in China, Russia, Italy, Saudi Arabia, the Philippines and South Africa.

In 2013, Huawei’s smartphones accounted for 87 percent of its phone product line in 2013, of which 12 percent were mid-to-high class phones priced over US$250, such as the flagship high-end smartphone HUAWEI Ascend P6, which is now on sale in over 100 countries and has surpassed three million unit shipments since it was launched on June 18, 2013.

After launching five new devices at the Mobile World Congress trade fair in Barcelona, Huawei’s Colin Giles said the group was taking early steps in the United States to build better relationships with mobile operators and directly with consumers via online shops.

But the group, which lags market leader Samsung and Apple, has yet to gain a foothold in the high-end segment of developed markets such as the United States, where it is viewed with suspicion after lawmakers flagged Chinese telecommunications equipment as potential security risks.

In the third quarter of last year, Huawei accounted for 3 percent of all phones sold in the United States, respectively, trailing Apple’s 36.2 percent and Samsung’s 32.5 percent, according to IDC.

Traditionally, mobile operators buy phones in bulk from manufacturers like Apple and then offer them for free or a low upfront cost to customers when they sign a new one- or two-year contract.

T-Mobile USA dropped this model last year in a move to cut costs and woo customers frustrated with restrictions on upgrades in longer-term contracts.

On Sunday, Huawei launched a mobile Wi-Fi hotspot, a new smartphone aimed at 18- to 30-year-old consumers, and two sleek tablets to compete with Apple’s mini iPad.

The company also unveiled its first wearable device, a fitness tracker called the TalkBand, in a bid to take a piece of the burgeoning category. The bracelet, which comes in yellow and blue among other colours and costs 99 euros, can count calories burned and steps taken. It can also be used to make calls.

Samsung launched a new smartwatch on Sunday to succeed its original Galaxy Gear wristwatch, which has failed to gain much of a following with consumers to date.

LG

LG Electronics aims to broaden its range of smartphones so sales this year grow at double the rate of the market, as the South Korean company seeks to retake the position of world’s third-biggest maker.

LG, who slipped behind Huawei last year with a market share of just under 5 percent, also plans to sell a smartwatch capable of connecting with rivals’ phones, mobile division president Park Jong-seok told reporters ahead of a Barcelona trade fair this week.

Smartphone shop in Europe

LG shipped 47.7 million smartphones last year, 81 percent more than a year earlier. But its mobile unit needs more growth to return to profit, after spending heavily on marketing to narrow the gap with leaders Samsung Electronics and Apple.

The company aims to increase sales through more models appealing to a wider consumer group, with the Barcelona launch of the G2 Mini – a lower-priced version of the flagship G2 – coming just weeks after unveiling a larger-screen G Pro2.

Growth of high-end sales in advanced economies is slowing as smartphones become more widespread, likely bringing overall sales growth to the market consensus of 10 to 15 percent this year, Park said.

Overall sales grew 38 percent last year to 1.0 billion smartphones, showed data from researcher IDC.

Park also said LG plans to continue reducing its reliance on local retailers in China where competitors include Lenovo Group, whose $2.9 billion offer for Google Inc’s Motorola handset division could see it leapfrog LG to global No.3 from No.5.

LG also has to contend with the low-priced phones of other local makers Huawei, ZTE and Xiaomi.

Anand B
[email protected]