It’s pronounced “who are we?” and a couple of years ago, the name could not have been more appropriate. Huawei was neither more nor less than one of those smartphone options that sits on a shelf near the back of the shop – sure, it looks more or less similar to any other smartphone, but the unpronounceable name and the bargain basement price suggest this is the smartphone equivalent of Kia or Hyundai.
It is worth keeping in mind, however, that the Kia Rio and Hyundai Accent are now among the most popular and highly rated cars in the world. Similarly, the latest Huawei smartphone was described by one of the most influential online tech magazines as “the phone the iPhone XS should be” and the company has lofty ambitions to be the leading smartphone manufacturer by 2020.
Peru leading the way
In Peru, however, this is old news. A year ago, market researchers were reporting a remarkable 27 percent growth in smartphone shipments over the previous year. But the bigger news was the market share in terms of manufacturers, Samsung having plummeted from a market-leading 27 percent to just 14 percent, and Huawei taking the top spot with 18 percent.
Smashing the value triangle to pieces
Part of Huawei’s success is down to the company’s insistence on rewriting the rules. Ask any MBA strategist and they will tell you a business needs can choose two out of speed, quality and price, but that the two it chooses will inevitably be at the expense of the third. Huawei has been consistently producing phones that effectively meet all three parameters, and it is only a case of brand image that has kept Samsung and Apple on top for so long.
But the smartphone market is a dynamic one. When choosing a car, a buyer might still pay a premium for a Mercedes or Lexus badge, but smartphone buyers are a more pragmatic group of people. What they want is to take their photos or play their online casino games or engage with their friends on social media. And they will take an unblinkered view of the merits of every phone on offer and its ability to deliver.
A changing marketplace
Parv Sharma is an Associate at Counterpoint Research and has been studying Peru’s evolving smartphone market. He said it has specific demands and features, for example established users rate number portability as a high priority, while rural areas currently have low smartphone penetration. Huawei in particular, but also manufacturers like LG and Motorola have zeroed in on these market characteristics and adjusted their sales strategies accordingly.
In the case of Huawei, the results speak for themselves, but it is also worth noting that Motorola registered annual growth of 150 percent, while Vietnamese carrier Bitel’s branded smartphones grew by almost 400 percent to take fifth position.
Richard Hu, the CEO of Huawei’s Consumer Division recently told CNBC that the company aims to be the number one smartphone supplier in the world by 2020. If Peru is anything to go by as a yardstick, that ambition could be more realistic than it sounds. 2019 will prove to be an intriguing year.