A dark horse in the global smartphone market Case

1. A Dark Horse in the Global Smartphone Market:
Huawei’s Smartphone Strategy
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Huawei’s Smartphone Strategy
Andrea Sinico
Adrian Bellittieri
Giovanna Gonzato
Joanna Bitar
José Dallagnol
Lovro Denona
MIB Trieste Business School

2. A Dark Horse in the Global Smartphone Market:
Huawei’s Smartphone Strategy
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A Dark Horse in the Global Smartphone Market: Huawei’s Smartphone Strategy
Case summary
After a solid growth in the past years Huawei aims to become the global leader in the
smartphone industry. With a sky rocketed growing during the last decade the global smartphone
market it’s increasingly reaching its maturity with a fierce competition between dominating brands
and a shift in the demand from developed to emerging markets.
A very complex product to produce, smartphones manufacturers shares hardware and
software suppliers and adopted multiple ways of distribution via offline and online channels. In the
low and medium end sector the competition between manufactures it’s on scale and price
meanwhile in the high end sector they differentiate through hardware design, software and services
with a high level of innovation in their products. The current leaders on the market, Samsung and
Apple archive a high level degree of differentiation creating a high brand loyalty.
After a beginning in the telecom equipment market, Huawei launched his first
wireless GSM-based solution in 1997. Initially viewed as a low end cell phone manufacturer,
Huawei shifted his ambitions also to the premium segment of the market and plans to become the
global leader by 2021. Focus on an integrated “cloud-pipe-device” strategy (cloud computing,
intelligent information networks, and smart devices). The company is giving an increase
importance to the device business in order to build a premium brand in the global consumer
market. The three pillars of Huawei’s smartphone strategy are:
- Repositioning:
Adopting a dual brand/channel strategy with a second brand (Honor) focusing on the low /
medium end market via the online distribution channel. His main brand (Huawei) it’s focus on the
high end market adopting mainly an in-store shopping experience besides the online sales channel.

3. A Dark Horse in the Global Smartphone Market:
Huawei’s Smartphone Strategy
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- System on chip development and Smartphone Design:
With a strong focus on R&D. Huawei is investing high resources to SoC development and
smartphone design. In 2004, founded HiSilicon a fabless IC company to design his proprietary
processors being the core of the latest smartphone models and joining an elite club of smartphone
leaders with their own SoC.
The company emphasized design of his products and partnered with high end camera and
audio companies such as Leica and Harman/Kardon in order improve the quality of these
components.
- Synergies between Businesses
The company it’s using background and technological capabilities as a telecom equipment
provider to take an advantage from the competition. Huawei developed the Kirin 950 SoC which
made a significant improvement to CPU efficiency, greatly enhancing battery life. Additionally
telecom network assets and relationships with carriers gives another advantages to its smartphone
business.
Conclusion
In an increasing competitive business environment, the strategy adopted by the company in
the past 5 years based on market repositioning, continued focus on R&D, and synergies between
business boosted Huawei to emerge as one of the leaders of the global smartphone industry.
However, a new stage in this process it’s arriving with many challenges ahead as creating a
user appealing brand as Apple and Samsung, become a leader in innovation, improve operating
systems and control the production chain, among others. After the success of the strategy in the
past period and due to the dynamic industry environment should adapt his strategy to become the
No. 1 company in the smartphones market.