Analysts acknowledged Huawei faces an uphill battle competing with Apple and Samsung in the US smartphone market, but speculated the Chinese vendor could gain a foothold if it finds the right niche.
Jeff Moore, head of Wave7 Research, told Mobile World Live (MWL) the brand names of Apple and Samsung are so powerful it will be “almost prohibitively difficult” for Huawei to gain share in the post paid flagship segment. Moore pointed out OEMs including HTC and Asus found this out the hard way and noted an attempt by Huawei to enter the US market with unlocked devices sold at Best Buy in 2016 ended in failure due to weak sales.
Apple and Samsung each command roughly a third of the US smartphone market according to Kantar Worldpanel ComTech data.
Moore said Huawei could make another run at the US prepaid market where it previously provided devices for brands including Cricket Wireless, Boost Mobile and Straight Talk, but explained it would need to differentiate itself from established competitors including Samsung, LG, ZTE, Motorola and Alcatel.
However, Recon Analytics’ founder and analyst Roger Entner suggested Huawei could carve out a niche for itself in post paid by undercutting Apple and Samsung on price. While the two brands dominate the top-tier segment, Entner noted not all consumers can afford a $1,000 price point even with finance options.
“If you come down a few hundred dollars then it [the market] looks completely different. There’s a huge customer segment that can afford $10 or $20 per month rather than $30 or $40 per month,” Entner told MWL.
He continued: “I think they’re going to focus on a niche – offering a high-quality, feature-rich, device that’s affordable. That’s what it will take to convince American consumers to try it. It’s the same route Samsung took 15, 20 years earlier.”
The speculation about Huawei’s US prospects follows reports the vendor is set to announce a partnership with a major US operator at CES in January. Huawei Technologies president Richard Yu all but confirmed the move, telling Associated Press the company believes it can offer value to operators and customers alike by providing a “better product, better innovation, [and] better user experience”.