Have Huawei introduced the most surprising device at the Mobile World Congress with their Watch, running Android Wear? Perhaps, but this is only part of Huawei's presence this week at Barcelona. Their Chief Executive, Yu Chengdong, has been giving frank and forthright interviews where he's been discussing Huawei's future and several competitors. He believes that the smartphone industry will reshuffle by the end of the decade and only three of the current major smartphone manufacturers will survive in the market by the end of the reshuffling. Of course, Yu believes Huawei will be in that top three, but if his vision of the future is to be believed, things are looking bleak for many other manufacturers: including Xiaomi. Xiaomi are not alone in Yu's pessimistic view: he believes that Huawei's true competitors are giant manufacturers that have made it in the developed smartphone markets (typically, the Western world) and that most Chinese smartphone makers will perish, making way for Huawei.
This is a bullish statement from a company yet to make a meaningful impact in the North American market with under 1% market share. In 2014, Huawei generated sales of over $74 million, increasing by almost 55% compared with 2013. Going forward, Huawei's sales target is between 90 to 100 million smartphones this year. However, very high sales is not what is needed: instead, Yu appears to base his opinion on the reasons why businesses need to succeed on innovation. As such, companies that appear successful right now may not survive in the long run. Xiaomi falls into this category: their business has shown tremendous growth but Yu feels their products are not innovative enough.
It's an interesting opinion. Arguably, one of the least innovative smartphone manufacturers is also the most successful (Apple), but whilst the hardware and features are not innovative, they do provide a platform to drive some software innovations. I do not wish to point my finger at the Apple iPhone as this is not the purpose of the article, but it is very difficult to find an innovative smartphone manufacturer in 2015. And one could argue that many products offer new features, but these only become innovative when they capture the heart, minds and spending thoughts of consumers all over the world. Samsung Pay, for example, is not necessarily a technologically innovative product but if enough people are seen using it, this generates more and more interest in the product and drives adoption. The Huawei Watch is not an innovative technological product, but it looks more like a traditional timepiece than most competitor designs and if it sees widespread adoption, this could push it towards being an innovative smartwatch.
It's clear that Huawei mean business when it comes to surviving in the longer term. Their Android Wear Watch has certainly generated a lot of interest and this is a good thing. Yu's comments and remarks have also gained news column inches: people are talking about Huawei. Yu's five-year survival plan is starting out on a good foot.