Chinese telecom equipment supplier-turned-branded smartphone maker Huawei is making a name for itself in mobile devices, moving into third place in worldwide handset shipments behind only Samsung and Apple (AAPL) by IDC’s figures, and going all-in with Google’s (GOOG) Android platform, according to a top company executive.
Richard Yu, Huawei's Consumer Business Group head overseeing smartphones and tablets, told the Wall Street Journal the vendor “worries about Android being the only option but we have no choice. And, we have a good collaboration with Google,” he said.
Yu said Huawei, which has tinkered with a Windows Phone-based model, backed off from Microsoft’s (MSFT) mobile platform because “it has been difficult to persuade consumers to buy a Windows phone. It wasn't profitable for us. We were losing money for two years on those phones. So for now we've decided to put any releases of new Windows phones on hold.”
As for the open source Tizen mobile OS, Yu said Huawei has “no plans to use Tizen. Some telecom carriers are pushing us to design Tizen phones but I say ‘no’ to them. In the past we had a team to do research on Tizen but I canceled it. We feel Tizen has no chance to be successful. Even for Windows Phone it's difficult to be successful.”
Despite employing a software team of some 2,000 people, Huawei has “no plans to build our own OS. It's easy to design a new OS, but the problem is building the ecosystem around it,” he said in the Journal's report.
Yu said Huawei’s history gives it a competitive advantage over the high number of smartphone rivals it competes with in China and elsewhere because it counts a number of telecom operators as its network equipment customers. Before branding its own handsets, Huawei made white-label units sold under the carriers’ names.
“As a white-label supplier, we had to compete against other white-label smartphones that cost less and had lower quality. It wasn't good for us. No brand, no value. That's why we started using our own brand,” he said.
The mobile device maker also is pouring a significant amount of money into software development and R&D, increasing its investment up to 30 percent every year, said Yu.
“User experience is key and we put a lot of resources in software research and development. We build our own user interface software on top of Android,” he said. “To provide better services, we have partnered with some software and Internet companies. The industry is changing and you cannot do everything by yourself.”
Growing through acquisitions, as one of its chief rivals Lenovo has done with its purchases of Motorola Mobility and IBM’s (IBM) x86 server business, is not in Huawei’s playbook, Yu said.
“We are not so eager to acquire companies.” he told the Journal. “We invest more in research and development. Larger scale can help lower costs and it's important. But it's not the most important thing. Without investing more in R&D, you can't bring better products and more value to consumers.”
And, playing off the recent Apple (AAPL) IBM enterprise mobility collaboration, Huawei wants a piece of the enterprise business, too, said Yu.
Two weeks ago, Wu revealed that Huawei plans to stop manufacturing some 80 percent of its smartphones geared for the low end of the market, while retaining only a few models and directing more of its resources and efforts at branding and boosting margin.