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hg0088.com改单技术 The world is big, but can it afford Huawei?

The world is big, but can it afford Huawei?

Source of information: Time: 2020-02-21 02:39:57

Millennium Tongzhou vitality north stream

Scott Cendrowski April 18, 2017

After the domestic smartphone market peaked, the Chinese giant began to take off in Europe again. But to challenge Apple and Samsung, the world's third-largest mobile phone maker must find a way to impress American consumers or maintain growth without American consumers.

Photo courtesy of Benedetto Cristofani

"Fortune" (Chinese version) -5,000 miles (8,046.72 km) away from the headquarters of southern China with a warm climate, Huawei is going deep into the forests, swamps and tundra of Finland, subverting the current two strong smartphone market .

Nokia's homeland, Finland, was once the center of the mobile phone industry, and later, like other parts of the world, it became the domain of Apple and Samsung. But in the past 18 months, Huawei's smartphone market share has skyrocketed there. Research institute IDC said that in the first quarter of 2016, Huawei's mobile phone sales in Finland were 10 times that of Apple. In October last year, Huawei's mobile phone quickly surpassed Samsung, winning the top spot in market share.

Today, strolling in Helsinki, you can't escape Huawei's billboards. When you see Jokerit, one of Finland's top hockey teams, you will definitely see Huawei's logo like a blooming flower; when you enter any electronics store, you will find, The sales of Huawei phones must exceed Apple and Samsung. IDC researcher Francisco Jeronimo flew here from London this winter and saw it firsthand. "Huawei is amazing, they have their phones everywhere."

Like many tech professionals, Geronimo used to think that Apple and Samsung would firmly occupy the high-end smartphone market for many years to come. These two companies have monopolized the top two mobile phones in the world since 2011. During this period, no third-ranked mobile phone company has challenged them continuously and powerfully, which also makes them have More means to achieve ultra-high profit margins.

Although the two giants have not yet shaken market control, Huawei may be the most powerful challenger. The company has 170,000 employees and annual sales of $ 61 billion. Since 2014, the company has taken the throne of Sweden's Ericsson and ranked first in the world in terms of sales of networking equipment. Networking equipment is the foundation that supports telecommunications systems. Today, the company aims to dominate the mobile phone market. It has made great progress in China and has won victory in Europe. Huawei's promotion in Western European countries is to sign a side agreement with wireless operators, which has not been reported before.

One of the reasons for Huawei's success is to possess a wide range of technical capabilities that competitors cannot match. All products of the wireless communication industry are produced by the company, including telecommunications networks that transmit signals, chips that connect to the network, and handheld devices. Smartphones are mainly produced in the big city of Shenzhen. Huawei is like General Motors paving the interstate highway before selling cars. With the large amount of cash brought by the sales of networking equipment, Huawei has invested more in research and development than any Chinese competitor, making its phone quality close to Apple's iPhone and Samsung's Galaxy.

The result is rapid growth. In 2015, Huawei sold 108 million mobile phones, ranking third in the world. Shipments in 2016 are estimated to have risen by 30% to 140 million units. The growth rate of operating income from mobile phones has increased by about 40% to 178 billion yuan (about 26.5 billion US dollars). At the same time, the global mobile phone industry There was a single digit increase. CK Lu, an analyst at Gartner who studies Chinese smartphone makers, said: "It's growing too fast. From a global perspective, Huawei is the most successful Chinese brand."

Huawei's outbreak has been brewing for a long time. The loan provided by the Chinese government helped Huawei develop its communications network business in Africa and Latin America, and the experience gained by the company helped it to win networking equipment agreements with major European operators. Today, Huawei is selling the latest equipment for these networks in Europe, and its smartphone market share doubled from January to September 2016 to 12.2%. Huawei ranked first in smartphone sales in Portugal and the Netherlands, and second in Italy, Poland, Hungary, and Spain. Like Apple and Samsung, Huawei is currently launching new products at the Beautiful Electronics Show in London and Munich, inviting hundreds of journalists to participate, and paying a lot of people to attend.

China is the world's largest smartphone market, and several local companies with comparable strengths are fighting for their boss status (see the sidebar "China's Four Big Smartphone Companies"). But even in China, Huawei's rise is shocking. At the end of 2015. Huawei achieved more than 40% sales revenue growth, surpassing Apple and Xiaomi, the low-cost, and won the top spot in the market for the first time. Huawei's recent market share varies depending on the statistical agency: either it is ranked first or there is a gap of a few percentage points from the top.

Huawei has no humble opinion that it will soon overtake Apple worldwide. Last November, the company ’s consumer business CEO, Yu Chengdong, told reporters at a product launch in Munich: “We will go step by step, innovation by innovation (Apple).” He later told Fortune , Huawei's mobile phone will surpass Apple someday in 2018. This goal is ambitious, but it is not unattainable: in the third quarter of 2016, Huawei's global shipments of smartphones reached 34 million units, behind Apple's 46 million units. (Both are far behind Samsung's 73 million units.)

However, to catch up with this gap, Huawei needs to replicate its success in Finland in many other places and in larger markets. This is not an easy task. Fortune magazine understands that in most parts of Europe, wireless operators using Huawei networking equipment can enjoy huge discounts on smartphones, which is a sideline agreement that has never been reported before. No other smartphone maker can come up with this promotion. However, the United States bans Huawei from selling networking equipment in its territory. Huawei cannot use this strategy, which also makes the wireless operators in the United States unaware of Huawei. Therefore, the company's smartphones are difficult to see in the United States and the market share is less than 0.4 %.

Some former Huawei employees said that the company's founder, Ren Zhengfei, often talked about entering the US market. In the United States, more mobile phones sell for more than $ 500 than any other country and are a gold mine of profit and reputation. But so far, Huawei's efforts have not been effective, and the company itself even believes that the situation will not change soon. Therefore, today's Huawei stands at a crossroads: can it really surpass Apple and Samsung if it is not enlarged in the US market? Or can it just go hand in hand with Apple and Samsung?

Just a few years ago, Chinese consumers didn't even know Huawei. The company has been one of many Chinese manufacturers of cheap, low-quality mobile phones for many years. Most of its products are "white label" mobile phones that are supplied to telecommunications operators, and their own logos are affixed on the back of these products. Production of these things, Huawei does not see the future, it even tried to sell this business in 2008, but did not find a buyer. Huawei's own employees take Samsung or Apple phones to work.

Ren Zhengfei, the founder who still holds the title of CEO and is responsible for Huawei's strategic orientation, certainly noticed this embarrassing situation. In 2011, Yu Chengdong, who was in charge of Huawei's European networking business, took over the consumer business. He knew that the company needed to enter the market for high-quality equipment. But change doesn't happen overnight. In an interview not long ago at Huawei headquarters, Yu Chengdong said: "I remember that in the first year of taking over the smartphone business, we sold less than 1 million units." Changing that status quo paid Yu Chengdong a "price", and he paid every On the way to travel for two weeks, I have grown a belly. Today, he no longer runs marathons. "I'm too heavy," he said.

However, Yu Chengdong and his team quickly turned Huawei's expertise in networking equipment into an advantage. Most of the 1,000 smartphone makers around the world prefer to use the hardware and software needed to make phones cheaply. Google provided the Android software operating system; ARM, a subsidiary of Japan's Softbank, sold the right to use its chipset design. And the intellectual property of the mobile network (the way to exchange data between the mobile phone and the tower) is not a shared technology, and Huawei is working from here.

When Yu Chengdong took office, Western and Japanese companies such as Qualcomm, Ericsson, Nokia, etc. held Western 3G mobile network patents, effectively blocking Huawei from many markets. However, Huawei is committed to the patents and standards for the next generation of 4G mobile phones. The network speed of 4G mobile phones is 10 times that of 3G, which is more suitable for the constantly updated version of APP culture. Counterpoint Research's Neil Shah said: "In the past three to four years, Huawei has invested heavily in intellectual property, almost comparable to Samsung and Apple." As a result, Huawei has led Samsung and Apple. Sells mobile phones in Western markets without paying for intellectual property lawsuits.

By 2014, Huawei began to produce the first smartphone that was arguably comparable to Samsung in quality, and even surpassed Samsung in some respects. Huawei was the first to install a modem on a mobile phone so that Chinese users can answer calls in the basement or parking lot. Other brands of mobile phones will have no signal when they encounter such an environment. Although it does not have the reputation as Apple ’s mobile phones, Huawei ’s mobile phones rely on powerful signal receiving capabilities, powerful cameras (a few months before the advent of Apple ’s iPhone 7, Huawei introduced a P9 with dual lenses to consumers), Design to make up. By the third quarter of 2016, 60% of Huawei's smartphone shipments were mid- to high-priced devices, which reversed its previous reliance on cheap phones.

The annual sales revenue of Huawei's networking equipment reached 35 billion U.S. dollars, and the resulting cash provided Huawei with resources to market mobile phones to Chinese consumers. The company has proven itself to be an agile adaptor, both low-end and high-end. When Chinese competitor Oppo won the favor of female consumers, Huawei responded immediately and came up with a new product line Nova; when Xiaomi proposed a business model for selling mobile phones online in 2014, it eliminated product pressure by eliminating retail costs. The floor price has attracted worldwide attention, and Huawei has accordingly produced the Honor, a cheap mobile phone brand that is only sold online. The glory of low prices accounted for 40% of Huawei's total shipments in 2015, helping to boost sales. However, due to the good performance of high-priced Huawei-branded phones, the company still achieved record revenue growth.

Occupying the Chinese market is a way for Huawei to become stronger, but it does not necessarily make it a lot of money. Neil Mawston of Strategy Analytics estimates that Huawei smartphone operating profit in the third quarter of 2016 was $ 200 million, while Apple's smartphone profit was $ 8.5 billion. In the Chinese market, competitors have succeeded and lost money to seize the market, which also has limited opportunities for Huawei in China. Yu Chengdong acknowledged: "Our consumer business can be profitable, but the profit margin is quite low compared to Apple and Samsung." The European market that can sell high-priced mobile phones is seen by Huawei as an opportunity for growth.

If it wasn't considered the leader in its own country, Huawei might not have won this opportunity. In 1987, Ren Zhengfei, an engineer in the military, founded Huawei in Shenzhen to sell telecommunications switches. On formal occasions, Huawei kept a certain distance from the Chinese government. Chinese media have widely reported that former Prime Minister Zhu Rongji had told Ren Zhengfei during the rapid expansion of Huawei around 2000 that he could arrange a loan of 300 million yuan (then worth 35 million US dollars). Ren Zhengfei refused: He didn't want to go too close to the government.

However, Huawei still enjoys less direct government support. China Development Bank, whose mission is to support Chinese companies that go global, has assets of $ 1.8 trillion, 64 times that of the controversial Export-Import Bank of the US. After Christmas in 2004, China Development Bank and Huawei signed an agreement to provide Huawei's customers in Africa and Latin America with US $ 10 billion in loans; the loan amount was later increased to US $ 30 billion.

Ren Zhengfei said: "Without government policies and protection, Huawei would not exist." Huawei's operating income has grown rapidly since the loan. Overall, sales increased from US $ 3.8 billion in 2004 to US $ 18.3 billion in 2008, an increase of nearly four times. According to Nathaniel Ahrens, who studies Huawei, Huawei has pushed down the prices of competitors' products by 10% to 30%, and Huawei executives travel with government officials on a daily basis to make transactions. Ahrens currently works for the Center for Strategic International Studies in Washington, DC.

The experience gained in emerging markets such as Africa and Latin America paved the way for Huawei's accelerated expansion in Europe. In 2005, Huawei signed a global equipment supply agreement with British multinational telecommunications operator Vodafone, and has since gained international status. By 2007, it had signed agreements with major European operators. By 2015, the quality of Huawei's smartphones has reached the quality standards of European operators and can be used in networks created by Huawei's equipment.

IDC research director Jeronimo said that Huawei's breadth of business gives it an important advantage in today's smart phone market. Geronimo used to work for LG, a South Korean conglomerate, to sell LG smartphones to Vodafone. Huawei offers operators a discount equivalent to 1% of the company's network equipment spending. They can use the saved money to improve network services or purchase Huawei smartphones. Jeronimo has confirmed this with at least one European wireless operator. He said: "If you don't buy Huawei's network, you have to pay a certain price. If you buy Huawei's network, you can enjoy a better price, and the money saved may be equivalent to 100% of the total cost. A few, that is, millions of dollars. In the end, operators have a strong incentive to buy Huawei equipment. "Jeronimo said. As operators profit from selling and renting Huawei products to consumers, and because the quality of Huawei phones has improved, these phones have a better marketing environment.

There is also an incentive that companies are not enthusiastic about talking: In a hotly competitive market, these companies are strictly conservative in the financial details of their cooperation with each other. Huawei told Fortune that it would not comment on "secret business arrangements with customers." Huawei's network customers Vodafone, Germany's T-Mobile and France's Orange also declined to comment. A spokesperson for Elisa, one of Finland's largest wireless providers, said that Elisa's core relationship with Huawei is built on devices, including USB Internet dongle and smartphones. But the spokesman said: "We cannot talk about the commercial details of the cooperation."

Regardless of the details, Huawei's success in Europe shows how important a strong relationship with wireless carriers is for smartphone manufacturers. This also helps explain Huawei's biggest dilemma: the delay in opening up the situation in the United States.

Huawei's smartphones do not rank in the top ten in the United States, even behind small companies such as BLU and OnePlus. The company's direct sales website, GetHuawei.com, has not improved. Huawei phones can be bought at Best Buy or Wal-Mart's website, but few buyers. In the third quarter of 2016, Huawei's mobile phone sales in the United States were only 153,000 units, while Apple sold nearly 12 million units.

For 10 years, Huawei's relationship with the Chinese government and its legendary relationship with the Chinese military have hurt its US business. It had tried to acquire US network server and switch companies in 2007 and 2010, but was blocked by the White House Committee on Foreign Investment in the US. The commission can block such transactions on the grounds of national security. In 2010, Republican senators blocked Huawei from selling networking equipment to Sprint Nextel. In a 2012 report, the House Committee on Intelligence expressed concerns about Huawei's government relations and advised U.S. companies to avoid using Huawei equipment. Despite the lack of evidence, the commission's recommendations have been influential, and it seems unlikely that Donald Trump's administration will become more inclusive.

Because it can't sell equipment to wireless carriers in the United States, Huawei can't build partnerships with them like in Europe. None of the four major U.S. carriers-Verizon, AT & T, T-Mobile and Sprint-has signed a cooperation agreement with Huawei. Since these operators account for 80% to 90% of the U.S. smartphone market sales, Huawei cannot impress consumers. Americans are the main place to buy mobile phones in brand stores, kiosks and websites of wireless operators. Nor can I find a Huawei phone.

Yu Chengdong, Huawei's consumer business director, acknowledged that Huawei needs to develop these relationships from scratch. "Our strategy in the past five years is wrong. We don't have the right people," he said. Not long ago, Huawei hired Michelle Xiong to help sell Huawei's smartphones. Ms. Xiong has previously been a wireless business executive at Verizon and has experience negotiating with equipment manufacturers. However, an employee of Huawei reminded that the contract with the operator takes at least one year, and that the company needs to achieve meaningful results in the United States, at least in the next three years. (Verizon did not comment on its relationship with Huawei, and AT & T did not respond to a request for comment.) Counterpoint analyst Shah said: "The United States has always been a bottleneck for Huawei and it takes time to resolve."

This bottleneck has not curbed Huawei's ambitions. At the end of the interview, Yu Chengdong said calmly, "We now want to enter the top two of the global market share and become the first place by 2021."

In addition to sharply increasing sales in the United States, Huawei may also find momentum from technological breakthroughs, which is 5G wireless services. Today, 5G exists more in the human imagination and has not become a reality (the standard will not be completed until 2020), but this technology is expected to make it 60 times faster than the current 4G network. More importantly, the number of connected devices supported by 5G has increased significantly, estimated to be 1,000 times that of 4G networks. Therefore, if 5G is used as an architecture, there will be a blowout in the development of Internet cars, residential, commercial and smart cities. Analysts believe that Huawei and Ericsson are early leaders in building 5G networks.

In November last year, in Finland, wireless operator Elisa announced a world record: its network's data transmission speed reached 1.9GB per second, which can support virtual reality at all speeds, and it is also a good choice for users watching movies online The fastest speed you can imagine. To achieve this speed, a test network built by Huawei. It gives people a glimpse into the next-generation information superhighway. Since there is at best a glimmer of hope for success in the United States, this network may also let people see what innovations Huawei must come up with if it intends to catch up with Samsung and Apple. (Fortune Chinese Website)

Translator: Tianyi

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