Huawei aims to be the top-selling smartphone vendor in the world in the next few years, passing No. 1 Samsung and second-place Apple (NASDAQ: AAPL). But the Chinese company will likely have to make big strides in the U.S. to do so.
Richard Yu, who oversees Huawei's consumer electronics business, said in an interview with The Wall Street Journal that the company hopes to be "the No. 1 smartphone, smart-device supplier in the world" within the next "four or five years." The company hopes to claim "more than 20 percent, maybe more than 25 percent" of the worldwide market by that time, Yu said.
Huawei was the third-largest smartphone vendor in the fourth quarter of 2015, according to IDC, with a worldwide market share of 8.1 percent.
Google (NASDAQ: GOOG) launched Huawei's Nexus 6P last fall, and the Yu said Huawei is preparing to release both a smartwatch and the MateBook, a two-in-one laptop. But he acknowledged that the company needs much stronger carrier ties to gain a foothold in the U.S. smartphone market.
"But, you know, in the U.S. market, people get smartphones mainly from the carriers," Yu said in the Journal interview. "We will need to cooperate with them to promote our Huawei brand flagship smartphone."
Indeed, very few American carriers sell Huawei phones to their customers. And that isn't Huawei's only challenge in breaking into the U.S. market: The company is banned from selling its network gear in America due to concerns it could be used by the Chinese government to spy on Americans, and last week The New York Times reported that the U.S. Commerce Department has subpoenaed Huawei, demanding that it turn over "all information regarding the export or re-export of American technology to Cuba, Iran, North Korea, Sudan and Syria."
Meanwhile, Huawei – like all smartphone vendors – is challenged by slowing growth in smartphone sales worldwide as handset replacement cycles continue to lengthen and penetration rates reach saturation in many regions. Yu said the company is planning to launch "a new flagship smartphone" featuring virtual reality technology by the fall. Huawei will need that device to be a hit if the company is going to gain serious ground on Samsung and Apple.
- see this Wall Street Journal interview
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