Published in Mobiles

Smartphone industry set to consolidate

by on26 February 2018

Competition is too brutal warns Huawei

The smartphone industry is set to consolidate as crucial players surrender to the market leaders, warned a Huawei bigwig.

Richard Yu, chief executive of Huawei’s consumer business group, told the assorted throngs at Mobile World conference in Barcelona that anyone at this stage in the decade-old industry’s history that had less than 10 percent market share was losing money. That means that at 10.2 percent market share Huawei must be making a bit.  But that means a lot of the rest are toast.

“In the future, only three to four vendors can survive, maybe only less than four”, Yu told reporters following a product launch event held ahead of the Mobile World Congress.

Smaller Chinese vendors were consolidating, and most would disappear, as they did not have enough resources to invest in the same levels of research and development, marketing and branding needed to gain global scale.

“If your market share is less than 10 percent you cannot be profitable. Over at 10 percent, at least, you can break even (and) over 15 percent you can make money,” he said.

Huawei’s smartphone business grew by around 30 percent in the last year and would increase even faster this year, with strong growth in both January and so far this month.

Huawei could become the second most significant smartphone maker this year or next, and sooner or later could be No.1, he said, speaking after his company unveiled a new notebook PC and two Android tablets.

It declined to launch a new flagship smartphone as it has done in Barcelona. Instead, it is set to launch its new flagship P20 smartphone at a standalone event in Paris next month, where Yu said Huawei would showcase “big and bold” innovation in camera technology. The device will compete head-to-head with Samsung’s new Galaxy S9 - launched here on Sunday - and Apple’s iPhone X.

Yu said Huawei would launch its first 5G-ready smartphone either in the third or fourth quarter, most likely in its Mate line of devices.

Last modified on 26 February 2018
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