Huawei, ZTE have high U.S. handset ambitions, face uphill battle

Chinese handset makers Huawei, ZTE and Lenovo have taken much of the smartphone world by storm. However, they will need to raise their brand awareness even more and get flagship devices sold by U.S. carriers to truly break through, analysts said.

Click here for a slideshow featuring the Grand S II.

Last week at the 2014 Consumer Electronics Show, both Huawei and ZTE announced new high-end smartphones, including the Ascend Mate 2 from Huawei and the Grand S II from ZTE. Both are sequels to earlier flagship devices, and both OEMs are promising that they will bring the phones to the U.S. market this year.

In an interview with FierceWireless, ZTE USA Lixin Cheng said the Grand S II, along with the nubia 5S and nubia 5S mini phones, will be coming to the United States. He declined to say which carrier or carriers will sell the phones, and also declined to provide pricing or availability information.

Richard Yu, CEO of Huawei's Consumer Business Group, promised that the Mate 2 would be released in the U.S. market, and he named AT&T Mobility (NYSE:T) and T-Mobile US (NYSE:TMUS) specifically as carriers that would be able to support the device. However, he didn't provide specifics on a launch date or a price for the device.

Despite plans to push more high-end devices in the U.S. this year, and despite years of building up carrier relationships, both Huawei and ZTE lack the kind of brand presence larger companies have, which is reflected in total sales. In the third quarter of 2013, ZTE and Huawei accounted for 5.7 percent and 3 percent of all phones sold in the United States, respectively, well behind Apple's (NASDAQ:AAPL) 36.2 percent and Samsung Electronics' 32.5 percent, according to research firm IDC.

"The talk last year was premature," Forrester Research analyst Frank Gillett told Reuters. "It's one thing to have the product. It's another thing to have all the relationships, build the distribution channels and do the marketing. We'll maybe start to see things kick in in 2015."

Tier 1 carriers, including AT&T, T-Mobile and Sprint (NYSE:S), have carried Huawei and ZTE devices, though usually not with the OEMs' branding. However, both handset makers could benefit if U.S. carriers shift away from device subsidies and toward device financing, a move that could benefit vendors that sell cheaper devices.

"They are already setting themselves up for where the puck is going to be tomorrow, when price becomes visible to the consumer again," ABI Research analyst Michael Morgan told Reuters. "There's the crack in the armor for them to sneak through."

For more:
- see this Reuters article

Related Articles:
Huawei focused on U.S. handset biz with networks in deep freeze
ZTE's Grand S II smartphone to get U.S. carrier support
Huawei announces Ascend Mate 2, promises to bring to U.S. market
Huawei could benefit as U.S. handset market shifts away from subsidies
ZTE creates separate mobile unit, promises to be more efficient
ZTE plans smart watch for 2014 to challenge Samsung, others

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