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New way opens for Huawei smartphones

It’s not always the high-end phones that dazzle the market. Late last year, Chinese smartphone upstarts Huawei unleashed a powerful secret weapon aimed at the bottom end of the smartphone market. The Ascend Y220 stormed the walls of market dominance built up by Samsung, BlackBerry and Nokia with a device that cost a mere R450.

In the first quarter of 2014, South Africans snapped up more than 300 000 units. Helped along by the higher-end Y300, selling at R999, and last year’s flagship, the P6, marked down to R4 599, March saw Huawei become the best-selling smartphone brand in the country for that month.

It may have been a short-lived lead, but it was in effect a warning shot to the rest of the market. And if that was a shot, then last week’s release of the new flagship, the Ascend P7, was a cannon blast. Its five-inch high definition display, 8MP front-facing and 13MP rear-facing cameras are contained in a body which, at 6.5mm, makes it the thinnest 4G/LTE smartphone on the market.  

“The main strategic intention of the phone is targeting the premium segment of the market,” says Yudi Rambaran, director of product marketing at Huawei South Africa. “While it is at a fairly attractive pricepoint, R6 999, it does compete effectively with premium smartphones from other brands.”

The P6 was originally shipped at a slightly lower price, around R6 500, but the brand was not yet established locally as a high-end smartphone maker, and sold fewer than 10 000 units a month. The P7 is shaping up at least to double the monthly sales of the P6.

“We’ve planned better to ensure we have sufficient phones in the market, and we’ve brought out the best possible product from a technology perspective,” says Rambaran. “We’ve focused on three areas we’ve identified as key: the carmera experience, the connectivity experience and the overall design.”

‘Range’ on the device
Even more important, Huawei has spent time working with the networks to ensure they “range” the device. Since networks effectively controll the cellphone sales channel in South Africa, the ability to get them to add phones to their ranges spells life or death for a brand or device in this country.

Rambaran agrees, pointing out that he joined Huawei only recently, specifically to manage product marketing strategy, along with a new sales director: “Relationships with the networks are the best they’ve ever been for Huawei. We established special resources to address their requirements.”

Ironically, Huawei has long dominated mobile broadband in South Africa, with its brand featuring on most of the 3G and LTE dongle modems plugged into laptops here. But only now is that position translating into serious growth in the smartphone space – driven by the Ascend Y220. Along with the MTN Steppa, a R500 phone based on a Qualcomm Reference Design, it has transformed the prospects for mass-market smartphone adoption.

The potential of the Y220’s successors – phones that may cost even less – has persuaded Huawei to pull out of feature phones altogether. That makes it one of the first manufactuers that had been making both feature phones and smartphones to abandon the low-end devices.

‘Entry-level phones’
“One of the key motivations of the Y220 project was to bring in an entry-level smartphone, creating a meaningful impact in emerging markets,” says Rambaran. “The buzz of the Y220 has created a lot of brand equity for us – consumers are starting to trust the Huawei brand, which didn’t really exist two years ago, and that filters through to the rest of the market.

“Naturally the P7 flagship won’t sell in the volumes that entry-level phones do, but it does create the brand aspiration. From that point of view, it is an important phone for positioning in the mass market. It helps us create this aspiration that naturally overflows into the mass market.”

Next up from Huawei are not only cheaper or thinner phones, but also a comprehensive content and service offering. Multimedia, education and e-books are all part of this vision. Both this content and the smartphones are expected to encourage data use – and that makes Huawei as attractive to the networks as do the phones themselves. –

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