Chinese smartphone makerHuawei is drastically paring its lineup of low-end models in a move that bucks the trend of mobile manufacturers ramping up the number and variety of handsets offered at the entry-level of the market.
Want ChinaTimes reported that Richard Yu, Huawei Consumer Business Group chief executive, said the mobile phone maker will stop manufacturing some 80 percent of its smartphones geared for the low-end of the market, while retaining only a few models and directing more of its resources and efforts at branding and boosting margin.
If Huawei’s moves prove successful, will it prompt some of its rivals to enact similar strategies to restrict the number of models sold into emerging markets?
Huawei made a sharp diversification from its core telecom network equipment manufacturing business into smartphones, riding a bolstered product lineup at the low-end to double its year-over-year shipment volume in Q2 2014 to 20.3 million units and a 6.9 percent share of the segment, behind only Samsung and Apple (AAPL), according to researcher IDC’s data. In particular, high sales volumes of its low-cost Y series models fueled Huawei’s sales outside China, IDC said.
But Yu said Huawei built its low-end roster to meet the demand of telecom operators, which currently account for some 65 percent of its mobile phone sales and retailers making up the remainder, rather than heeding the needs of its customers. The impetus to expand its low-end smartphone lineup has been driven by telecom operators wanting to expand their customer base, he said.
The company’s new strategy to sell more mobile devices through online channels has propped up the portion of units it sells outside of telecom operators to some 50 percent, the company said.
In late July, Huawei reported its sales had spiked by 19 percent for the first half of 2014 to $21.9 billion and an operating profit of about 18.3 percent.
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