Huawei has no plans to build a Tizen phone and won't release new Windows Phones

Huawei does not plan on building a smartphone running on the open-source Tizen platform, according to a senior company executive, dealing yet another blow to the fledgling smartphone platform. Richard Yu, CEO of Huawei's consumer business group, also said Huawei is putting on pause plans to introduce new phones running Microsoft's (NASDAQ: MSFT) Windows Phone platform.

Huawei rival Samsung Electronics has been the strongest backer of Tizen thus far but has indefinitely postponed the commercial launch of the Samsung Z, the first Tizen phone, as it works to build up the application ecosystem for the platform.

Richard Yu, CEO of Huawei's consumer business group, said in an interview with the Wall Street Journal that Huawei has "no plans" to use Tizen. "Some telecom carriers are pushing us to design Tizen phones but I say 'no' to them. In the past we had a team to do research on Tizen but I canceled it," he said. "We feel Tizen has no chance to be successful. Even for Windows Phone it's difficult to be successful."

Yu added: "We have no plans to build our own OS. It's easy to design a new OS, but the problem is building the ecosystem around it." Huawei was the world's No.3 smartphone player in the second quarter, according to research firms IDC and Strategy Analytics, trailing only Apple (NASDAQ: AAPL) and Samsung.

Huawei is still a board member of the Tizen Association, according to the group's website, but Yu's comments indicate that the company is backing away from launching any kind of Tizen-based products. Most of Huawei's smartphones run Google's (NASDAQ: GOOG) Android platform, as is the case with Samsung.

Samsung in July postponed the launch of the Tizen-powered Z to "further enhance [the] Tizen ecosystem." Samsung did not give an updated launch date for the Z or give any more information on its future plans for Tizen.

Yu noted that there are few options for smartphone vendors beyond using Android, which dominates the market. According to IDC, Windows Phone actually saw its market share decline globally in the second quarter to 2.5 percent, down from 3.4 percent in the year-ago quarter, making it a distant third in the market. Yu said Huawei has found it difficult to sell Windows Phone products.

"We have tried using the Windows Phone OS. But it has been difficult to persuade consumers to buy a Windows phone," Yu said. "It wasn't profitable for us. We were losing money for two years on those phones. So for now we've decided to put any releases of new Windows phones on hold. We have worries about Android being the only option, but we have no choice. And we have a good collaboration with Google."

That Huawei is putting on hold plans for new Windows Phone devices is definitely a blow to Microsoft's efforts. However, over the past year, Microsoft has diversified and expanded its hardware partners to spur sales in China, India and other emerging markets. Microsoft's partners now include Foxconn, Gionee, Lava, Lenovo, LG Electronics Longcheer, JSR, Karbonn, Micromax, Prestigio and ZTE.

Huawei, which still makes most of its sales and profit from selling network gear and related services, has said its smartphone shipments jumped 62 percent year-over-year in the first half of 2014 and that it is on pace to reach its goal of shipping 80 million smartphones for the full year. The Chinese network equipment and device vendor said that it shipped a total of 64.21 million devices in the first half, including 34.27 million smartphones.

"There are too many smartphone makers in the market, especially in China," Yu said, in discussing the state of the business overall. "The whole industry is consolidating and some global vendors are disappearing. But even though most vendors are suffering, Huawei is growing, not only in terms of shipments and revenue, but also profit. Last year we became the third-largest supplier by shipment."

Yu noted that Huawei builds its own user interface software, called the Emotion UI, on top of Android, its software team has roughly 2,000 staff members, and the firm is increasing its investment about 20 percent to 30 percent every year. "To provide better services, we have partnered with some software and Internet companies," he said. "The industry is changing and you cannot do everything by yourself."

For more:
- see this WSJ article (sub. req.)
- see Engadget article

Related Articles:
Samsung indefinitely postpones commercial launch of its first Tizen smartphone
IDC: Huawei, Lenovo grew Q2 smartphone market share at Samsung and Apple's expense
Huawei sees 62% bump in first-half smartphone sales, commits to 80M shipments in 2014
Huawei's first-half revenue jumps 19% thanks to LTE, smartphones
Huawei, ZTE launch branded smartphones in U.S. to raise their profiles