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Huawei bolsters budget to secure smartphone dominance

Huawei bolsters budget to secure smartphone dominance

Huawei has announced details of its new plan to secure status as the best-selling manufacturer of smartphones within the Sub-Saharan Africa market and challenge for the number one market position.

Likun Zhao, General Manager for Huawei Consumer Business said the company is taking practical steps that include supplementing its marketing budget starting with the new Y-Series handsets in a few weeks.

"We designed a 360-degree marketing campaign for the upcoming Y-Series to focus on three key features of Y-products; being the full view display, turning selfies and face unlock. We will focus on different key features for different Y devices for the youth. After discussions with network operators and retailers, we have confidence that our marketing campaign will produce results. This is the first time we put a lot of resources and investment for the entry level. We have increased the marketing budget by nearly fifty percent in order to broaden it, because it used to focus mostly on flagships. For the middle level in Sub-Saharan Africa we have the most market share and that is why we have arranged a limited budget for those smartphones."

Zhao says the increase in budget was also influenced by sales generated by the newly launched P20-Series.

"We had a good performance for the P20-Series compared to the P10-Series. We have doubled the sales of the new smartphone compared to its predecessor since we launched it on 6 April. The P20 Pro has the biggest growth compared to the P20 and P20 Lite, and I think more consumers are choosing the most innovative phone. This is the reason our VP is visiting South Africa to meet the media, our partners, operators and retailers about our strategy and performance and to get their suggestions. This is important for Huawei."

African operator buy-in critical

Jim Xu, Vice President of Sales and Marketing at Huawei Consumer Business Group, who flew to South for a three-day visit last week, told ITWeb Africa that the growing popularity of Huawei phones in Africa mirrors that which the company has witnessed in other parts of the world.

"There are a lot of countries around the world where we are doing well. In the UK we have grown between three and four times more than last year in Q1. In Canada all the operators just like in South Africa, welcome our products like the P20. We launch the series there next month. European people love the Huawei brand and its products."

Xu said it is still important to gain operator support. He revealed that cooperation with operators in Africa specifically has resulted in fewer dual SIM smartphones being produced - in line with telco preference and their reluctance to expose consumers to competitor offerings.

He also explained the thought process behind the launch of its Honor brand in Africa just over a month ago.

"Honor is an e-commerce or internet brand because we see the e-commerce business growing. Many people - and the youth in particular - love to buy things on the internet rather than through our traditional offline business. In terms of consumers, we have adopted a different business model."

Xu expects the volume of sales for the P-Series in Africa will double or even triple by the end of 2018.

Research from Gartner in February showed that as global smartphone sales recorded the first ever decline during the fourth quarter of 2017, Chinese brands Huawei and Xiaomi remained resilient.

The two were the only vendors in the global top five to experience growth in the fourth quarter during which almost 408 million units were sold, representing a 5.6% decline compared to the same period in 2016.

Gartner said Huawei's new smartphone additions, including Mate 10 Lite, Honor 6C Pro and Enjoy 7S, helped broaden the appeal of its smartphone offerings.

The GSMA'S 2017 Mobile Economy report for 2017 recently found that Sub-Saharan Africa accounts for nearly a tenth of the global mobile subscriber base and is expected to grow faster than every other region over the next five years.

Last month Huawei pointed out the growing contribution that the African market is making to the company's global profits as part of its financial results for 2017.

The company said its smartphone business grew to a market share of over 15% across all of Africa last year.


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