By Sven Grundberg
BARCELONA, Spain--Locked out of the lucrative U.S. telecoms
network market, Huawei Technologies Co. now has its eyes trained on
America's smartphone market.
Huawei's Chief Executive Eric Xu told reporters at the Mobile
World Congress here Wednesday that its focus will shift to the U.S.
this year--after not releasing new devices there last
year--complementing its push in Europe and Asia.
"We're going to make a change this year, and we're going to
continue to launch smartphones for the U.S. market," said Mr. Xu,
one of three senior executives who rotates through the CEO job. Mr.
Xu is set to hand over the baton to Gou Ping by the end of next
month, under the company's six month rotating CEO system.
Mr. Xu said the company won't try to challenge the positions of
Apple Inc. and Samsung Electronics Co. in the U.S. Rather, the
company sees itself competing with the large number of
manufacturers fighting for market share under those two giants, he
said.
This week, Huawei took the wraps off several new, high-end
smartphones and tablets, like the seven-inch MediaPad X1--a razor
thin EUR300 tablet, powered by Google Inc.'s Android operating
system, that its executives repeatedly compared with Apple's
high-end iPad Mini.
Huawei's push into the largely high-end U.S. market comes as
several device makers like Nokia Corp. and BlackBerry Inc. are
turning their eyes to faster growing, entry-level smartphone
markets in places such as India and Africa. While Huawei will
continue to sell ultracheap Android smartphones in these markets,
Mr. Xu said the cheap phones aren't its main focus.
"We're not interested in the low end of the market. Only by
pursuing high end can we pursue our growth," he said.
Consumer devices account for an increasing part of the Chinese
company's revenue. Last year, it accounted for 23%, or about $9.1
billion, of its overall revenue, the company said. This year, it
aims to increase smartphone sales to between 80 and 100 million
devices, from 50 million last year.
Its range of tablets and smartphones largely run Android's
operating system. The company has also joined with Microsoft Corp.
to make Windows Phone-powered devices. Sales of these haven't been
satisfactory, Mr. Xu said.
Currently, Huawei's smartphone sales largely stem from countries
in Asia. China alone accounts for 40% of the company's smartphone
sales, while other major markets include the Middle East and
Africa, Latin America and Europe.
In a bid to improve its brand awareness in the U.S., Huawei last
year signed several sponsorship deals with the likes of U.S. pop
stars the Jonas Brothers. The company has also recruited several
foreign executives to help it transition from a low-cost maker of
telecom equipment to a global maker of its own-brand products.
Those include Colin Giles, a former Nokia veteran, who now runs the
company's consumer group.
"For sure we need to build the brand, we accept that," Mr. Giles
said in an interview. "Also we need to improve distribution and get
good at retail."
That is all the more challenging in the U.S., where lawmakers
have effectively shut Huawei out of the wireless-equipment market.
A congressional report in 2012 concluded that Huawei posed risks to
national security, alleging that the companies' equipment could
become a vehicle for Chinese spying. The company has called the
report misleading.
Sam Schechner contributed to this article.
Write to Sven Grundberg at sven.grundberg@wsj.com
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