How Huawei is becoming a giant of mobile technology?

Huawei was already a giant in its homeland for years. The Chinese manufacturer has been gaining ground all its rivals and has become one of the leading worldwide mobile telephony an ultra -competitive segment that has nevertheless seen as the firm was going stealing the portfolio companies like Samsung or Apple but also direct competitors like Xiaomi.

It has long been absolute reference in the market, and although its initial role was reserved for China, for years the investment in marketing and R & D have paid off. The presentation of the Huawei P8 last year and the recent Huawei P9: this company is in the best form of its story.

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More than 100 million mobile phones in 2015

Not many manufacturers can boast figures Huawei, which sold 108 million smartphones in 2015, representing a growth of 44% over the previous year. It was the only outstanding figure of this manufacturer, whose revenue grew even more: they did almost 70% to 20,000 million dollars, showing that the global expansion has really sat well.

For years Xiaomi attracted the interest of all the fantastic price / performance ratio in its terminals has been reclaimed from a company that still does not make the leap to the international market. But Huawei has pursued a much more consistent in that international expansion line, but has not neglected the Chinese market, which is also absolute protagonist. In fact late last year Canalys revealed that Huawei was already the largest manufacturer of China ahead of Xiaomi .

In the second quarter of 2015, Huawei became the third largest manufacturer of smartphones worldwide behind Samsung and Apple. The main consultants confirmed the explosive growth of a company that had invested heavily in this international commitment: about half of its devices sold outside of China.

The other Huawei

Although most of our readers know the firm for its smartphones, the company was created with different orientation: that of providing telecommunications equipment to all kinds of companies and organizations. In The Economist published a profile of years a company that was founded by Ren Zhengfei in 1987 in true American style startup.

Zhengfei had worked as an engineer without military graduation in the People’s Liberation Army, but a huge retrenchment was to leave that in 1983 and decided to create his own company. He did it in 1987 after moving to Shenzhen, which by then was abuzz with activity in the manufacture of electronic components sector. He broke the bank, took out 21,000 yuan (about $ 5,000 at the time) and founded Huawei Technologies Co. Ltd.

Although the first years were very hard, the company secured a lucrative contract to provide the switchboard C & C08 surpassed everything that was in China at the time and that meant its final takeoff 90. As explained in The Economist the expansion strategy was unique: instead of trying to attack too competitive markets, focused on peripheral areas with lower resistance to new players. He managed to go conquering one by one, what was causing this manufacturer was becoming more important and conquering turn territories to which in principle could not be accessed.

The company thus managed to enter dominated by traditionally strong competitors such as Cisco Systems, Nokia Siemens Networks, Alcatel-Lucent markets and, of course, the, Ericsson. Absolute protagonist the evolution of Huawei in the sector has been brutal and telecommunications equipment they remain their main source of income. At the rate the mobile segment progresses, however, that could change in the near future.

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A quiet but remarkable expansion

As said Ryan Reith, an analyst at IDC, the strategy of Huawei has been important growth markets in Latin America and the Middle East, but also “in more mature areas but are important in terms of visibility (Western Europe, Australia, United States). They have a great product design, but how are you investments that help direct and get the visibility that ultimately the channel wants to sell their products.”

These excellent data have been consolidated in recent quarters: CounterPoint Research published last October a report in which he revealed how the 12 largest manufacturers of smartphones worldwide, nine were Chinese and together they were responsible for one of three phones that are used on our planet.

International Business Times explained as Chinese manufacturers such as Xiaomi, Huawei and ZTE have had an important aid: Grants from the Chinese government, which are intended to boost the native technology industry and raise an important question,: can these companies keep those good behaviors if such aid disappear?

This expansion has been very successful in Europe but in the US things have been more difficult. Several intelligence agencies that country made it clear that the company was not entirely reliable because they could not trust “that is free from the influence of a foreign country”. Here the tensions between China and the United States are obvious, and have already caused in the past other companies -Google and Apple suffered significant vetoes in China have had problems in China.

The truth is that this question will not have short – term response, and while that does not happen what is clear is that Huawei is taking a great game that good health. It not surprisingly became partner Google exception when developing and manufacturing the Nexus 6P, the terminal top end of the official family of mobile dispositions of Google.

This strategy is another essential ingredient: its second brand, Honor, with outstanding terminals as the recent Honor 5X who have taken advantage of the success of the philosophy of online sales has exploded in other Chinese manufacturers, and has allowed the number of units and incomes should be increased significantly.

In fact already indicated that this brand had sold 20 million handsets in the first half of 2015 (Huawei sold 48.2 million total during this period), and this year is expected to be explosive growth in countries like India, where 300% growth expected.

The commitment own components and alliances bears fruit

Not many manufacturers can boast of making their own processors phones. Samsung and Apple have been traditional players in this field, but other manufacturers have had to rely on specialized companies such as Qualcomm and MediaTek.

This is where Huawei also wanted to make a very significant investment in R & D. The company takes time presuming to offer their own processors in many of its terminals, increasingly, manufactured by HISILICON, which has become one of the most important Chinese IC design firms.

This subsidiary of Huawei has bought from ARM Holdings different to make design and manufacture their own processors based on designs from ARM licenses, and that has allowed gradually will witness developments increasingly relevant. The latest Kirin 955 of Huawei P9 combine four ARM Cortex-A57 and four 1.8GHz ARM Cortex-A72 2.5GHz, in addition to combining with a Mali-T880 MP4 GPU 900 MHz.

That, of course, gives a competitive advantage to Huawei, which even without the most powerful micros of the Exynos 8890 market, the Snapdragon 820 and Apple A9 surpass it in various apart other notable for promoting energy efficiency. That can increase the battery life, a section that Huawei care with other elements of its design philosophy and is also an aspect very taken into account by users.

This integration of own components not only reduce costs: it also avoids potential patent violation litigation. That is another key of an international expansion that could lead to reach 130 million units this year. At least that is the goal of a company that does not stop growing, and in fact continues to strengthen its alliances with outstanding strategy.

It happened last year with the above case of Google, which as rumored maintain that alliance to any of the Nexus that the company will launch this year with Android N, but there are more important partners. The latest addition to this strategy has been Leica; the prestigious firm of digital photography has collaborated with lenses and software in the new Huawei P9 and according responsible for these companies contribute to the development of cameras in future devices of the firm. The future Huawei looks really good.

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