Moving The Smartphone Target Market

It may seem obvious but part of point of trips is to generate dialogue. Huawei is interested in what we have to say about the perception users outside China have of them, as well as our opinion on their latest product trends, and we’re interested in Huawei both internally for how they work, generating ideas/products, but also externally and how they approach different markets, especially moving into North Americas and expanding in Europe.

While Huawei has been on the periphery of most tech media since the launch of the P1 and the P2, and more prominently so with the Mate 7 and the P8, they are still a brand with little recognition outside of technology enthusiasts in the West. Huawei is well known in China, and product launches are well attended with lots of interest, as well as deep discussions with the media, but it is only recently that they have begun to extend invitations to similar outlets in the west. Part of it is to explain their story, their philosophy, and the other part is to explain to journalists such that they can run their own interpretation, providing Huawei smartphone reviews with at least an element of analysis about the company in general at the same time.

A cynic might argue that in order to get a foothold into the US or expand in EMEA, there needs to be a combination of a large targeted marketing campaign as well as a definitive product individualization, such as an Apple device, or a Samsung, though to LG’s Flex or HTC’s characteristic look.  But even then, HTC’s current situation is in a state of flux despite heavy marketing for a number of reasons, meaning that a big push has both potential risk and reward. As part of this trip, we discussed with Huawei on how exactly we perceive the smartphone market, what are the interesting elements of it and how Huawei can open up to us with both information, structure, and sampling.

It was quite telling that during a roundtable discussion, the journalists around the room were asked what sort of products they were interested in. It was almost a unanimous chorus pointing towards the flagship models for two main reasons – firstly, most other companies provide flagship devices, so there is a rolling comparison and knowledge of an adapting market, but the second point was that the flagship devices typically bring in more variance, engineering prowess and showcase the best of the company talent. Both points are certainly true, and I (Ian) personally can’t disagree with their responses.  


The Huawei Mate S - the company's current flagship device

My argument was slightly different, especially if we compare to the industries I regularly write about; from my perspective, I’d prefer to test the popular devices. With a $600 smartphone, everyone has an opinion on the design, the hardware, the benchmark results, or simply fanboyism, but not everyone has $600 to spend. While a lot of users might discuss the virtues online, or debate over small details, the reality is that a good portion will opt for something around the $250-$300 range for their main device or family devices, depending on contract, region, availability and other features. This is similar to when we get $2000 laptops, or $500 motherboards – lots of discussion, but in reality fewer people will buy them and go for the $800 2-in-1s or sub-$160 motherboards.

Andrei brought up a good point regarding this, which relates back to the first point about mainly reviewing flagships – if you test in the $250 range for smartphones, then there are 80 or so devices to choose from and the review either has to be in a vacuum comparing to almost nothing or based on the limited knowledge of what exactly is in the market, as it's impossible to review every alternative that exists out there. It provides an interesting dilemma for companies like Huawei and their competitors, because depending on what the media wants to look at will dictate what products the manufacturers will sample for review and/or how many are distributed. Thankfully Huawei are open on this and are willing to entertain our future device requests. 

This becomes all important for entry into their non-standard regions, if they feel that there needs to be more presence that just a flagship model. Huawei over the years has slowly reduced their smartphone lineup from around 80 new models a year to fewer than 25, even though most of us only ever discussed three or four of those in 2014/2015 (P8/P8 Lite, Mate 7 and Honor 6). Chances are that the metric of devices moving into the west should increase over time, in both flagship and mid-range markets especially.

It’s Just Another Smartphone Manufacturer™ Discussing Corporate Structure, Strategy and Kirin 950
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  • s.yu - Sunday, December 6, 2015 - link

    Why you certainly hold yourself to high standards! If you have $1000, you could try to get dirty rich with it, or you could try to fulfill some proper dream and make yourself some money in the progress. Their business practices make it very clear that they're preying off the ignorance of the masses, and they try very little to conceal it. That's why it's repulsive.
  • buhusky - Friday, December 4, 2015 - link

    Did you bring a burner phone and laptop with you?
  • tipoo - Friday, December 4, 2015 - link

    I agree with this entirely -

    "My argument was slightly different, especially if we compare to the industries I regularly write about; from my perspective, I’d prefer to test the popular devices. With a $600 smartphone, everyone has an opinion on the design, the hardware, the benchmark results, or simply fanboyism, but not everyone has $600 to spend. While a lot of users might discuss the virtues online, or debate over small details, the reality is that a good portion will opt for something around the $250-$300 range for their main device or family devices, depending on contract, region, availability and other features. This is similar to when we get $2000 laptops, or $500 motherboards – lots of discussion, but in reality fewer people will buy them and go for the $800 2-in-1s or sub-$160 motherboards."

    Budget-mid range laptop and smartphone reviews are just as interesting to me as the flagships.
  • Communism - Saturday, December 5, 2015 - link

    Indeed. Spending 600 USD on a phone made up of ~100-120 USD worth of essentially commodity parts is a reflection of the complete lack of consumer awareness or care for anything and everything other than fashion.

    Fashion being a primary concern of consumers is incompatible with capitalism as the only regulatory mechanism in capitalism is the consumer's purchase of the product (Homo economicus).
  • V900 - Saturday, December 5, 2015 - link

    That is literally one of the dumbest things I read in the comments here for a very long time...

    The price of the materials and wool in a high quality, custom fit 400$ suit is also around 20$...

    Because guess what, there are many other factors involved in the retail price of something, than the price of the components involved.

    Even Apple, who have the highest margins in the business only makes about 200$ on a 6-700$ phone, which goes to show how meaningless BoM guesstimates of the price of components are...
  • s.yu - Saturday, December 5, 2015 - link

    One-up that.
  • Daniel Egger - Friday, December 4, 2015 - link

    Interesting read but actually more due the information what you (and potentially whole leading countries on this planet) do not know about Huawei than some new facts.
  • Amandtec - Friday, December 4, 2015 - link

    I was believing everything until you said the VP's name is Bruce Lee. April fools. Ha ha. You got me.
  • davegraham - Friday, December 4, 2015 - link

    did they mention their founder's ties to the PLA at all? I'm curious since that seems to be fudded around a bit and was one of the primary reasons why Huawei has had almost no penetration in the US MSP, Gov't, and other (I2, ES2, etc.) backbone space. Honestly asking, not trying to fluff.
  • name99 - Friday, December 4, 2015 - link

    "Throughout all of this, it becomes clear that there is a white elephant in the room."

    Mixed metaphors. You can have a "white elephant" (a pointless project pursued for the sake of vanity and showing off) or "an elephant in the room" (an obvious point that everyone is aware of, but everyone is also embarrassed to bring up) but it's extremely rare that you want both in the same sentence and certainly not (yet) in this case. (IF Huawei's push into the US is very expensive and very unproductive, and becomes generally known as such, then in five years or so the sentence WOULD work and would be witty --- but not yet.)

    At least you didn't also mix blind men and elephants, or pink elephants, into the sentence!

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