Huawei planning LTE phones, looking beyond Android

SAN DIEGO--Huawei, the world's second largest network vendor, said it plans to significantly boost its presence in the U.S. handset market--an effort that would include pushing its brand more heavily at smartphone shoppers. The company also said it will sell LTE phones next year and is considering other smartphone operating systems beyond Android.

James Jiang, executive vice president of product marketing for Huawei


Specifically, the company said it aims to become the nation's fifth largest handset vendor within the next three years. The company is currently among the top 10 handset makers in the United States.

"We firmly believe the goal is very achievable," said James Jiang, executive vice president of product marketing for Huawei.

Jiang pointed to the company's progress in the U.S. handset market so far, which includes handset and smartphone sales through regional players Leap Wireless (NASDAQ:LEAP) and MetroPCS (NASDAQ:PCS). The company also recently has scored device deals with AT&T Mobility  (NYSE:T) with the Impulse 4G and T-Mobile USA with the recently announced T-Mobile SpringBoard tablet and the T-Mobile Sonic 4G Mobile Hotspot.

Jiang said Huawei plans to increase handset and smartphone sales in the United States by expanding its distribution with carriers and working to entice feature phone users to upgrade to  smartphones via relatively inexpensive devices.

Perhaps most important, the company said it also plans to more heavily advertise its brand in the United States. Such an effort is notable considering the Huawei phones currently sold by Tier 1 carriers AT&T and T-Mobile carry only the carrier's respective brands and not Huawei's brand. Globally, around 80 percent of Huawei's products carry the company's brand and the remaining 20 percent are sold on a white-label basis through carriers that rebrand the devices with their own logos. Jiang said Huawei plans to increase the number of phones in the United States carrying its own brand. MetroPCS and Leap currently sell phones sporting the Huawei brand.

"Huawei's strategy is interesting in that they appear to be emulating the model that Taiwanese vendor HTC used early on to break into the U.S. market, namely producing devices which the carriers sell under their own brands, rather than the OEM's (original equipment manufacturer) brand. HTC very successfully built relationships with the major U.S. carriers based on this white label strategy and has now become one of the most successful smartphone makers in the world under its own brand," said Ovum chief analyst Jan Dawson. "The T-Mobile SpringBoard tablet, the T-Mobile Sonic 4G Hotspot and the AT&T Impulse 4G are all in reality Huawei devices, sold under the carriers' brands. This allows Huawei to get past its lack of name recognition in the U.S. while still getting its devices onto carriers' shelves and consumers' pockets."

Huawei also said it plans to sell LTE-capable phones next year, though the company didn't provide any further details. MetroPCS, AT&T and Verizon Wireless (NYSE:VZ) currently operate LTE networks and sell LTE phones from the likes of Samsung, Motorola Mobility (NYSE:MMI) and others.

Finally, Jiang also said Huawei is considering using operating systems beyond Android, which currently powers all of the company's U.S. smartphone offerings.

"The operating system is just one aspect of the product," Jiang said. "We're also looking into other operating systems [besides Android], but we don't have anything more specific on that at this point."

Jiang added that Huawei will "continue to work with Google closely," explaining that the company's new SpringBoard tablet is the first 7-inch Android tablet running version 3.2 of the platform.

Huawei last week announced the launch of a new business unit targeted at the enterprise space. Huawei's Enterprise Business Group sits alongside its other units--Carrier Network Business Group, Device Business Group and Emerging Business Group--and currently counts around 10,000 employees globally, a few hundred of which are in the United States. Huawei said it plans to expand the number of its employees in the United States in its Enterprise Business Group division.

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