China's Huawei Technologies Co. plans to sell its new high-end
flagship phone in the U.S.—a first for the world's third-largest
smartphone maker as the company tries to grab a bigger piece of the
premium-handset market.
On Thursday, Huawei unveiled the Mate 9, its latest flagship
smartphone, with a €699 ($775) price tag in Germany. The company
said the new phone will initially be sold in 12 countries in Asia,
Europe and the Middle East, and be available in the U.S. later.
The U.S. release date is expected to be in January, a person
familiar with the matter said. In the U.S., the Mate 9 will likely
be sold online, not through carriers, the person added.
The launch of the Mate 9 is part of the Chinese technology
giant's effort to sell more high-end devices to take on Samsung
Electronics Co. and Apple Inc. in the global smartphone market. The
new flagship phone comes with Huawei's own interface software,
which uses artificial intelligence to automatically keep
applications, photos and videos organized. That feature helps
prevent the handset's speed and performance from slowing, the
company said. In April, Huawei launched its high-end P9 smartphone,
which features a dual-lens camera.
Huawei has set an ambitious goal of becoming the world's biggest
smartphone maker within five years, but it has some catching up to
do. It held a 9.3% share of the global smartphone market in the
third quarter, behind Samsung's 20% and Apple's 13%, according to
research firm International Data Corp.
As the world's biggest market for high-end smartphones, the U.S.
is crucial for premium-handset makers. But Huawei faces challenges
there as its telecommunications networking equipment has been
effectively banned due to security concerns. While Alphabet Inc.'s
Google Nexus 6P, manufactured by Huawei, was sold in the U.S. last
year, the Chinese company hasn't released its own flagship model in
the U.S. until now.
It is an opportune time for the Chinese smartphone vendor: Rival
Samsung Electronics Co. has been struggling with a global recall of
its latest high-end phone, the Galaxy Note 7, after reports that
the phones caught fire. Samsung was forced last month to halt
shipments of the Note 7 ahead of the peak holiday season.
"Huawei would happily encourage consumers looking for a premium
device to consider options like our Huawei P9 and Huawei Mate 9," a
company spokesman said. "Both phones give consumers the variety and
options to address their specific needs while providing the latest
technological advancements like the Leica dual-lens camera."
Huawei, already one of the world's biggest suppliers of
telecommunications networking equipment, initially focused on
inexpensive handsets in China, but over the past few years it has
expanded in overseas markets such as Europe, the Middle East,
Africa and Latin America. The company has also been selling
more-expensive phones to boost margins. In 2013, 3.5% of Huawei
phones cost more than $400, but in the first half of this year,
that portion rose to 13%, according to IDC.
To justify the high price tags on its flagship models, Huawei
has touted features such as processor chips designed in-house and
cameras developed in collaboration with German optics company Leica
Camera AG.
On Thursday, Huawei also unveiled a limited edition of the Mate
9 designed by Porsche Design Group, a unit of German luxury car
maker Porsche AG. The standard Mate 9 comes with a 5.9-inch
display, while the Porsche Design version has a 5.5-inch curved
display and will cost more than $1,500. The phones also come with
longer battery life and fast charging, which Huawei says delivers
in 20 minutes enough of a charge to last a full day.
Analysts expect the discontinuation of the Galaxy Note 7 to
boost sales of other high-end phones from Samsung's rivals such as
Apple and Huawei.
After Samsung stumbled with the Note 7 recall, Huawei executives
said internally that the Chinese company needs to be extra cautious
about the quality and safety of its own phones, according to Huawei
employees. In September, Richard Yu, head of Huawei's smartphone
business sent an email to his staff saying that Samsung's recall
was "a very big lesson" for Huawei.
"This is a rare opportunity for other market players to have an
advantage over the incumbent Samsung," IDC analyst Melissa Chau
said.
Some of the consumers who would have bought the Note 7 are
expected to seek other high-end options. While the main beneficiary
will likely be Apple, whose iPhones are priced similarly to the
Note 7, "There is definitely some room for Huawei," she said.
Like Samsung, Huawei mainly sells phones powered by Google's
Android operating system.
But Huawei's success is far from guaranteed, as the company also
faces tougher competition in China, the world's biggest smartphone
market, from domestic rivals who are growing much faster.
While it was the top smartphone vendor in China in the first
half of this year, it fell to third place in the third quarter,
overtaken by Oppo Mobile Telecommunications Corp. and Vivo
Electronics Corp., according to IDC. Shipments at both Oppo and
Vivo roughly doubled from a year earlier, while Huawei's shipments
rose 5.1%.
Write to Juro Osawa at juro.osawa@wsj.com and Archibald
Preuschat at archibald.preuschat@wsj.com
(END) Dow Jones Newswires
November 03, 2016 10:05 ET (14:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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