No. 3 Phone Maker Huawei Faces Hurdles in Quest for Top Spot, Says ABI

Huawei faces headwinds in its aim to become the top global smartphone vendor in five years, said a Monday ABI Research report. The Chinese smartphone maker has risen impressively to the third-largest global smartphone maker primarily on sales in its home market, but it will need to get a strong foothold in the U.S. and Western Europe to achieve its goal, while creating its own chipsets and Android-based mobile operating system, ABI said. Huawei “may succeed with chipsets, but many other competitors tried similar OS development tactics in the past to no avail,” said analyst David McQueen, calling it a “tough” goal despite Huawei’s brand strength and volume gains. Huawei “strikes an appropriate balance between supplying cost-effective devices to low-end markets and setting high standards for its creativity, fashion, and innovation in its high-end market product lines,” said McQueen. It was helped by the “ongoing collapse” of shipments from brands including Blackberry, HTC, Sony and Microsoft Lumia, he said. By developing its own chipsets, Huawei can avoid dependency on IC suppliers including Qualcomm, and control costs in the process, but creating its own mobile OS is more challenging, said McQueen. Other Android smartphone makers -- Samsung, for one -- tried to develop competing OS platforms and “failed miserably in their attempts,” he said. Huawei can avoid the same fate if it can provide a viable ecosystem that doesn't focus only on volume sales "but also encapsulates other business models based around revenue share agreements and partnerships, while offering a range of devices to allow for customer modifications,” he said.