Countless smartphones were announced at last week's Mobile World Congress, but Huawei's showing was one of the more intriguing at the event. The company has some incredibly lofty goals, intending to ditch its past reputation as an ODM (Original Design Manufacturer) focused on budget devices and embracing an exciting future as an industry leader. Since such a thing doesn't happen overnight, what's the vendor's strategy to come out on top in the coming years? We briefly caught up with Richard Yu, Huawei's chair of devices, and picked his brain on some of his company's ambitions.
Can you tell us more about your strategy going forward?
Yu: The D series is a high-end flagship with high performance in the industry. We want the D series to set the industry benchmark with our competitors. P series offers the industry benchmark in being the slimmest but also in being the most compact and fastest dual-core. So both series are high-end.
Y series is entry level and G is for mass market, mid-range. We want to be the benchmark -- the performance in those series should be better than our competitors. We are dramatically changing our strategy. No matter what phone, whether it's low-tier, mid-range or high, all of our phones should be the best!
In the past we've been mainly an ODM, working with carriers. They're always saying "we want lower prices." This squeezes us and it makes life quite difficult. So we'll still do some ODM, but we want to become more of an OEM (original equipment manufacturer) using the Huawei brand. That's why we want to launch the best dual-core, the best quad-core. Every component inside the phone, no matter whether it's the camera or microphone, it's going to be the best in class. The best means number one. Your radio performance, audio performance, display, everything. The Huawei brand is not so famous. But we want our products to the best, which dramatically changes the consumer's mindset. That's our strategy. In this industry, nobody remembers number two, just number one. We want every product to be a champion.
How soon do you plan to be the number one manufacturer?
Yu: In three years we want the Huawei brand to be the industry's top brand. I have a strong feeling that the industry is consolidating. Seven years ago, the telecommunication industry had many suppliers but now they're all consolidating, one by one they're combining or dying. The mobile phone industry, I strongly believe, will become a matter of survive or die (sic).
There are many vendors and suppliers. Most of the big companies take up more than 70 percent of the profit. Samsung itself gets another 20 percent. These together take up 95 percent of the profit in the industry. In the past Nokia was number one. Now as you can see, the industry is changing and consolidating. The industry's moved to smartphones, so it's not like before. It's very sophisticated. In order to achieve high performance, you need a lot of R&D and technology investment, and those costs are very high. That makes it very hard to make a profit. It's not very sustainable. This is why I think it's necessary for us to consolidate.
Are you getting any kickback from carriers regarding the new strategy, or are they accepting of this change?
Yu: In the beginning, there was some concern because nobody recognized the Huawei brand. But because of our good performance, we found that the customer has accepted. We have confidence that we meet the testing requirements. We're also working with carrier teams. After enough time, we win their trust and people accept the new brand.
Vodafone will launch the Huawei brand in April in more than ten countries globally. In the past Vodafone has used our phones as an ODM, with no Huawei brand at all. That's not good for the end user. This [launching the brand] gives us more confidence.