INSUBCONTINENT EXCLUSIVE:
Huawei has built up its business in more price-conscious markets.Ren Zhengfei, the founder of Chinese telecoms behemoth Huawei, likens the
company to a ruthless "wolf" tirelessly running down its prey, an ethos that could soon make it the apex predator of the smartphone
world.Despite being essentially barred from the critical US market, Huawei surpassed Apple to become the world's number two smartphone
maker in the second quarter of this year and has market leader Samsung in its sights.Huawei has achieved this in part by refocusing away
from the futile fight for US access and toward gobbling up market share in developing nations with its moderately priced but increasingly
sophisticated phones, analysts say."Huawei's image and brand recognition across markets and regions is getting better and better," said
Tarun Pathak of global market analysis firm Counterpoint."They've differentiated and positioned their products across price segments, which
makes an interesting conversation in terms of competing with Apple and Samsung."Founded by Ren, now 73, with a few thousand dollars in 1987,
Huawei focused initially on the backbone hardware for telecommunications networks, growing to become the world leader.Fifteen years after
introducing its first phone, Huawei surpassed Apple in the April-June quarter to take second place globally, International Data Corporation
(IDC) said last week, the first time since 2010 that Apple was not in the top two.- Raising the ante -Huawei's consumer products chief
Richard Yu raised the ante Friday, saying the company could overtake South Korean giant Samsung by late 2019."The importance of Huawei
overtaking Apple this quarter cannot be overstated," senior analyst Ben Stanton of Canalys wrote in a report on the latest sales
data."Huawei's exclusion from the US has forced it to work harder in Asia and Europe to achieve its goals."Based in the southern China
tech hub of Shenzhen, Huawei had already been pushing into developing markets even before political pressure -- peaking this year with
President Donald Trump's China trade war -- effectively slammed the US door shut.Huawei's exclusion stems in part from US distrust over
Ren's earlier career as a Chinese military technologist and fears that Beijing could strong-arm its tech champions into aiding with
Huawei denies any government links.In the meantime, Huawei has built up its business in more price-conscious markets, from Indonesia to
Saudi Arabia, South Africa and even Europe.Analysts note that as those markets mature and customers graduate to higher end phones, they will
already be in Huawei's ecosystem."If Apple and Samsung want to maintain their market position, they must make their portfolios more
competitive," said Canalys's Stanton.Samsung shipped 71.5 million handsets for a 20.9 percent global market share in the second quarter,
compared with Huawei's 54.2 million phones and 15.8 percent share
Apple sold 41.3 million iPhones for a 12.1 percent slice.Huawei shipped 95 million units in the first half and is targeting 2018 sales of
200 million, a threshold crossed previously only by Samsung and Apple.Further growth will keep Huawei firmly on the US security radar.The
Trump administration nearly killed Huawei's Chinese rival ZTE this year, imposing tough penalties for violating US sanctions by selling
goods to Iran and North Korea.- The 5G challenge -The penalties, since lifted, would have deprived ZTE of US electronics components it
Huawei, however, produces its own key components, giving the US less leverage.But an industry sales slowdown and market saturation could
limit its growth.IDC said 342 million smartphones were shipped worldwide in the second quarter, down 1.8 percent year-on-year and the third
consecutive quarterly decline.In the long term, the lack of a US foothold will be an Achilles heel for Huawei, analysts said, and some
market studies project Apple reclaiming the number two spot when new iPhone models are released later this year.And as Huawei customers
graduate to higher end gadgets above $600, the Chinese company will have to compete head-to-head with Apple on quality and features."As you
move upward, there are fewer competitors but the features, the challenges, the innovation, and the expectations grow," said Counterpoint's
Pathak."That is something that Huawei, Apple and Samsung all need to capitalise on."A critical test looms in the next two years, when 5G
systems are expected to roll out and manufacturers will be judged on how their smartphones handle the enhanced capabilities.Huawei is
already gearing up for the challenge
Its RD spending grew 17 percent last year to $13.8 billion, putting the company in the same league as Samsung, Amazon and Google's parent
Alphabet, while recent product launches in Europe have been increasingly glitzy."Things like camera capabilities and how Huawei rises
overall to that (5G) challenge will decide if it is among the Apples and Samsungs, but I think they belong," Pathak said(This story has not
been edited by TheIndianSubcontinent staff and is auto-generated from a syndicated feed.)
