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Huawei readying an answer to Apple’s upcoming iPhone

SHENZHEN — China’s Huawei Technologies is aiming to grow mobile phone shipments by only a modest amount this year as it gears up to go head-to-head with the hotly anticipated 10th-anniversary edition of Apple’s iPhone.

Huawei is shooting for shipments of 140 million to 150 million mobile phone units in 2017 - up marginally from 139 million in 2016. Photo: AFP

Huawei is shooting for shipments of 140 million to 150 million mobile phone units in 2017 - up marginally from 139 million in 2016. Photo: AFP

SHENZHEN — China’s Huawei Technologies is aiming to grow mobile phone shipments by only a modest amount this year as it gears up to go head-to-head with the hotly anticipated 10th-anniversary edition of Apple’s iPhone.

Huawei, the world’s No 3 smartphone maker which declared last year it will someday surpass both Apple and Samsung Electronics in market share, is shooting for shipments of 140 million to 150 million units in 2017 - up marginally from 139 million in 2016. But it’s also putting the finishing touches on its most powerful device yet, the Mate 10.

Huawei is the largest of a coterie of Chinese smartphone makers that have grabbed global market share via affordable phones with premium specifications. The Mate 10 will debut right around the time Apple is expected to take the lid off its own flagship device, but will trump the iPhone in many aspects, said Mr Richard Yu, chief of Huawei’s consumer division.

“We will have an even more powerful product. The Mate 10, which has much longer battery life with a full-screen display, quicker changing speed, better photographing capability and many other features that will help us compete with Apple,” said Mr Yu.

Mr Yu issued his challenge after Huawei on Thursday (July 27) reported a sharp fall in revenue growth in the first half, as smartphone sales tapered off from the dizzying pace of 2016. It posted a 15 per cent rise in revenue to 283.1 billion yuan (S$57 billion) in the first six months of 2017 - half the pace at which sales grew last year.

In 2017, Huawei was named number 49 on BrandZ’s Top 100 Most Valuable Global Brands, number 88 in Forbes World’s Most Valuable Brands and number 40 on the Brand Finance Global 500 Most Valuable Brands lists.

“Huawei devices have resonated with global audiences because of our clear commitment to quality, experience and innovation. With a robust consumer devices ecosystem that includes critically acclaimed smartphones, tablets, wearables and now PCs, consumers know that they can trust Huawei to deliver the kind of experience they are looking for in a premium device,” said Mr Yu.

As Huawei’s brand presence increases, it will continue to grow its expansive retail network to reach 56,000 retail stores worldwide by the end of this year — an increase from 35,000 in May last year.

Yet its breakneck expansion last year came at a cost: Huawei’s earnings grew at their slowest pace in five years in 2016, as it sank money into 5G research and a marketing blitz to gain ground in smartphones. The company didn’t release first-half income numbers on Thursday.

Mr Eric Xu, one of Huawei’s several rotating chief executives, warned in December that mounting expenses could damage profitability. He pledged in a memo to staff to overhaul its culture, weed out unnecessary expenses and re-think the way it conducts business, expecting global uncertainty to mount this year. Its main business of telecommunications equipment is slowing as phone carriers rein in network rollouts to prepare for the advent of faster 5G standards.

Huawei’s consumer business group, comprising mainly smartphones, reported a 36 per cent rise in revenue to 105.4 billion yuan during the first six months. The unit is targeting 25 per cent growth in consumer revenue to 222 billion yuan in 2017, down from about the 42 per cent growth in 2016. The consumer division also sells smart watches, tablets and accessories from earbuds to cameras.

Huawei controlled a 9.8 per cent share of the global smartphone market in the first quarter, according to research firm IDC. It enlisted prestigious camera brand Leica to improve photo quality as a dual-camera became standard-issue for flagship handsets. Its latest, the 5.5-inch P10 Plus, goes for as much as 5,588 yuan. The company also introduced its first laptop — the MateBook X — in May to compete with HP and Lenovo in this segment. AGENCIES

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