Huawei is one of the few Chinese smartphone manufacturers that have done well outside of its homeland. Huawei has a big following in other parts of Asia and in Europe, but when it comes to the US, many people don't know who Huawei is (and many can't even pronounce the name properly). Why is that? Well, Huawei hasn't been that successful in getting its smartphones sold by carriers in the US. Huawei does have some entry-level and mid-range smartphones on carriers here in the US, like the Ascend XT which was made for AT&T's Prepaid brand. And Huawei does sell its smartphones unlocked at some retailers. However, that isn't enough for the company to really make a name for itself in the US. So how can Huawei make it big in the US? Let's explore that thought.
AT&T and Huawei's Relationship
AT&T and Huawei have been working together for quite a few years, mostly on smartphones for its prepaid brands as we already mentioned. But in 2017, it was reported that Huawei would be selling a flagship device on AT&T's network in early 2018. Many thought it would be the new Huawei Mate 10 or Mate 10 Pro, and it was slated to happen. But then, just ahead of CES, something happened and the plans fell through and the Huawei Mate 10 Pro is only being sold in the US as an unlocked device – like the Mate 9 last year. Now when we spoke with Huawei at CES, the company told us that nothing had changed with AT&T, and that the two are still working together as partners. Of course, Huawei can't just come out and say exactly what happened, but it's clear something happened, and it's likely due to the government.
US Government Alleges Huawei Spies On Its Users
This goes back plenty of years, but the last time Huawei attempted to make a big splash in the US, plenty of allegations came out about how the Chinese government is using Huawei's smartphones to spy on users in the US. China and the US haven't been in the best relationship, and Huawei is partly funded by the Chinese government. So the argument does have a bit of weight to it. However, after numerous investigations (including one by The White House itself) found no threat from Huawei. That investigation was 18 months long, so it wasn't a small investigation into Huawei's products and business at all. But the stigma of this is still weighing heavy on Huawei in the US, even in 2018.
There was a report from Reuters earlier this month that stated that the government is pressuring carriers to not do business with Huawei. This includes selling Huawei's smartphones and other products, but also to steer clear of using its network equipment. A big part of Huawei's business is its networking business. Where it sells small cells, and other equipment that carriers use on its towers. Which means that US carriers are forced to work with Ericsson, and Nokia mostly, since Huawei is out of the running. Now it's important to mention that AT&T has not confirmed that it has ended things with Huawei, and this is just rumors. So take it all with a grain of salt. But when Reuters does report on something, it is most likely true, based on its track record.
Huawei Can Overcome These Hurdles with its Honor Brand
Huawei has a second brand, which it likes to treat as a separate company, and that's Honor. The company markets Honor for the millennial generation, and it is not sold at any carriers or in physical stores, only sold online. It's basically Huawei's e-commerce brand. But many people do not associate Honor with Huawei, because the company does treat them as two separate brands. And that's how Huawei can make inroads in the US, by leveraging the Honor brand.
As it stands, there are more Honor smartphones being sold in the US, than Huawei devices. For instance, there is the Honor 6X, 7X and V10. Meanwhile Huawei only has the Mate 9 and Mate 10 Pro. Not to mention the fact that the Honor 6X has done very well for the company since it launched at CES last year, and the Honor 7X is likely following in those footsteps. Honor smartphones are also typically cheaper, which is going to help Huawei gain market share in the US, as well. And right now, the best way to break into the US market, is by selling cheap, but good smartphones. That's actually how Motorola was able to pick up a decent amount of market share after it had several years of declining market shares before the Google acquisition (then the Lenovo acquisition), by using the Moto G line.
Honor is the way to go, for the US. Now it might be wise to just leave Huawei out of the marketing material for the US for now, and sell just Honor devices in the US, even though Huawei won't sell these smartphones at carriers. It still sounds like the best way to get into the market right now, by selling Honor's smartphones at retailers like Amazon, B&H Photo and Newegg.
Sell Wearables and Other Tech
Huawei is no stranger to developing products other than smartphones and tablets. Like smartwatches and even virtual reality headsets, which it has sold in the US before. Now Huawei has not released numbers on the sales of its smartwatch, but it seems to have done somewhat well for them. These are products that Huawei can sell in the US without carriers – and in fact, it already is. Sure Huawei wants to grab a portion of the smartphone market share, but the US market is already very saturated, and it's tough to get into this market anyways. And selling other products will open the brand up to more users, who might be more likely to buy a Huawei smartphone the next go-round.
For a new smartphone maker to make it in the US is already a tough task. But with the added scrutiny of Huawei's closeness with China's People's Liberation Army and the Chinese Government, it makes it even tougher for Huawei. It's not totally impossible for Huawei to make it in the US, just a bit tougher than it would be for another Chinese manufacturer like Xiaomi or Meizu, due to that relationship. It's something that Huawei should be able to overcome, but it may take quite some time. Of course, the best thing to do is to distance themselves from the Chinese government, which could go along way towards showing US consumers that they will not be spied on if they buy a Huawei smartphone.