Huawei's Shao Yang furrows his brow. The Huawei Device Group Chief Marketing Officer has just been asked if he’s worried about Samsung's upcoming 6.3-inch Galaxy Mega smartphone; the phone that, a few weeks ago, unceremoniously dumped Huawei's 6.1-inch Ascend Mate from the throne of World's Largest Smartphone.
“Bigger is not always better,” he says with a grin.
Huawei's Device group has come a long way since its creation ten years ago in 2003. With a portfolio originally concentrating on mobile broadband and other connectivity devices, Huawei entered the smartphone market in 2009 with its first Android smartphone, the U8230. By 2011, Huawei was top five amongst Android vendors worldwide.
Last year, Huawei shipped 32 million smartphones worldwide, a staggering 60% increase on its numbers in 2011. Towards the end of 2012, Huawei climbed to third in global market share among smartphone manufacturers for the first time, grabbing onto a 5% piece of the pie, behind only Samsung (29%) and Apple (22%). 70% of its total revenue comes from outside its home in China.
But Huawei didn't join the party to be third. This year, its ambitions include shipping 60 million smartphones. Based on 2012's numbers, that would move it past Apple (47 million) and have it closing in fast on Samsung (63 million). But Huawei’s ultimate goal is set for 2017; as Shao Yang puts it, "Who makes the world’s best smartphone? We want the answer to be Huawei."
Unfortunately for Huawei, neither Apple nor Samsung look likely to roll over and die anytime soon. So how does Huawei intend on slaying not one, but two giants? Apparently, the answer is, by not being Apple or Samsung.
Philosophically, Shao Yang muses, "Apple and Samsung are like superheroes. Whatever Apple tells its customers, they must do. If Apple changes the power connector, they must change. If Apple changes the SIM card, they must change. If Apple changes its interface, they have no choice but to use it. Whatever Apple says, they do." And as for Samsung? Its recent launch event for the Galaxy S4, comprising of musical skits and pitches to middle-aged housewives seems to indicate that it might not know its core demographic as well as it should.
Which is why Shao Yang is quick to emphasize that Huawei’s customers are its most important resource. He compares Apple and Samsung to "superheroes" overseeing the masses, whereas Huawei uniquely places its customers on a pedestal above it. As Huawei’s various corporate slogans and branding suggest – "Realize your Potential", "The phone made for you", and most recently "Make it Possible" - Huawei doesn’t want to make you want its phones, Huawei wants to make phones you want. "Innovation is not just in my mind, it is in your mind. We want to know what your problems are, and how to solve them for you" says Shao Yang.
It’s a heartfelt pitch, and it makes a lot of sense, but it doesn’t address what will be Huawei’s biggest hurdle in achieving its world conquering goals. Without even going into the controversy and security concerns surrounding the company name, for many people, Huawei still means Made in China. And Made in China means made cheap, low-quality and unreliable. Everything you don’t want in the world’s best smartphone.
Shao Yang willingly acknowledges that Huawei needs to improve its brand image. He also recognizes that branding, advertising and corporate sponsorship aren’t enough - not that it’s stopped Huawei from recently becoming the primary sponsor of Spanish La Liga club, Atletico Madrid. Shao Yang knows that, as a China-brand, for Huawei to become number one, it needs to deliver devices that aren't just as good as its competitors, they need to be better - in fact, he won’t settle for anything less than the best.
Enter: Huawei’s three-phase plan. Shao Yang explains, phase one has already started, and focuses on developing and manufacturing the best possible hardware. This started last year when Huawei began manufacturing its own processors (the quad-core K2V3 CPU), and will continue this year with more development into chip technology as well as display and power management improvements. Huawei will also focus strongly on industrial design and aesthetics, with research investigating different materials and finishes.
Phase two is scheduled to commence in 2014 and continue into 2015, and will focus on software and UI improvements. While Shao Yang states that Huawei will continue using Android OS, it plans to improve upon its Emotion UI, and put more emphasis on its Cloud services, digital home solutions and cross-platform software integration (between its tablets and connectivity devices).
As for phase three, scheduled for 2016 – 2017, Shao Yang simply states that Huawei will "redefine the category." You see, Huawei doesn’t want to just beat Apple and Samsung, it wants to completely change the game. It wants to deliver an experience so unique, it redefines the smartphone category. When was the last time that happened? Perhaps in June 2007 when Apple released its first iPhone? Before you scoff, know that Huawei is serious when it comes to innovation. Almost half of its 140,000 employees work in its research and development facilities, and 13% of its annual revenue, some US$4.6 billion, goes into R&D. It might seem like an impossible goal, but believe it or not, Huawei actually has the resources to pull it off. Whether it will or not remains to be seen.
But back to today. "Bigger is not always better," Shao Yang says with a grin, "it’s the experience that counts." And there’s a knowing look from Huawei’s Device Group CMO here, as if he wants to reveal something else, but isn’t allowed to tell us. Whatever it is, he doesn’t seem too concerned about what Samsung is up to. Will Huawei’s Ascend Mate beat Samsung’s Galaxy Mega this year? Probably or probably not, but you can be sure that better - and possibly bigger - devices will be coming out of Huawei in the years to come.