Thursday, June 11, 2015

Huawei Wants the Attention of US Smartphone Users

Huawei, the Chinese company that is the top-ranked telecommunications equipment vendor in the world by revenue and the fourth largest smartphone vendor by market share, created an online store about a year ago, to sell their own versions of a smartphone directly to US customers,

Huawei introduced the P8 Lite, which is an exceptionally priced mid-tier smartphone, along with being a fitness tracker made in similarity with Jawbone called the TalkBand B2. Zhiqiang Xu, the
President of Huawei Device USA, said that this device is just the start in an interview Tuesday. Xu also plans on releasing a premium smartphone in the future, similar to Apple's iPhone 6 and Samsung's Galaxy S6.

Huawei is focusing on online sales in order to reach US customers. This is just part of a push from several Chinese vendors to get around US carriers and make smartphones that directly appeal to US consumers with relatively cheap prices, yet still making high-quality components. Carriers removed subsidies that showed the actual costs that range from $100 to $1000. Xu believes that the market will change and that E-commerce is the perfect solution with consumers buying their smartphones.

Consumers are looking for affordable smartphones in the market that aren't stuck with a single carrier. Huawei claims that its P8 Lite, for $250 with no contract, will be compatible with any US carrier's LTE network. Xu believes this smartphone is good enough to sell millions of units around the world.

It's far from the traditional strategy of working with US carriers, who haven't paid any attention to the Chinese vendors smartphones, and dropping Huawei and ZTE to being prepaid or the budget side. Huawei's Xu is hoping to make that one or more blockbuster phones that change everything.

It's very unlikely for a blockbuster to come from the online market. In the US, most of us prefer to just buy our smartphones directly from our carriers or a partner to our carriers. So far this year, 26% of smartphones were sold online versus actually walking into a store and physically buying a phone right there, according to Kantar WorldPanel. Online sales of unlocked devices have an even smaller percentage. Those who do shop online are typically looking for a better deal in prices.

Google is the only real exception to this. Google introduced its Nexus 4 smartphone a few years ago and it was sold online for $350 without a contract. Last year Google released the Nexus 6, which worked with carriers, to ensure more retail support. This hasn't stopped those like Alcatel who, earlier this year, made an Amazon powered store, or ZTE's US store.

Xu believes going with online sales is heading in the right direction, but he doesn't know when US consumers would take unlocked smartphones seriously. Carriers help educate consumers. AT&T said Monday that they're trying to have their retail partners sell phones without contracts or phone subsidies and focus more on non-contract options such as the carrier's monthly payment program.

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Xu is aiming for more digital and social marketing to help raise awareness for He's still considering more common ways of marketing, such as big sponsorships or eye catching TV commercials, which can be a bit more pricey. Huawei is trying to make their unlocked smartphones more appealing by offering a two year warranty on the P8 Lite, along with a monthly installment program split between 3 to 12 months. Xu claims that you can't find a better deal on Earth with the P8 Lite.

Huawei is focused on its online presence to help its own brand, but they still will work with the carriers to sell smartphones through regular channels. Xu said that he'd prefer to partner up with a carrier along with offering their device on their own website. Smartphones with a carrier are more appealing with well established brands with bigger marketing budgets versus high end smartphones without a carrier to support them.

Content originally published here

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