After overtaking Apple in smartphones, Huawei is aiming for No. 1 by 2020
Huawei could become the number one smartphone player in the world by 2020, Richard Yu, CEO of the company's consumer division told CNBC.
In a wide-ranging interview, Yu talks about the rise of the Huawei since releasing its first
own-brand smartphone in 2010, three years after Apple's iPhone debuted.
Huawei is focusing on innovations from foldable screens to artificial intelligence to help grow its consumer business.
Yu told:Walk around any major city in China, and you'll see Huawei stores and ads everywhere. That's because it's the number one player in the world's biggest smartphone market, and has become a major contender on the world stage.
The Chinese technology firm overtook Apple to become the world's second-largest smartphone vendor by market share at the end of the second quarter of the year and has set its sights on the number one spot — currently held by Samsung — by 2020.
"Next year, we will be very close to number one, maybe we will be on par with Samsung. And at least the year after, maybe we have a chance (to be number one), the year 2020," Richard Yu, the CEO of Huawei's consumer division, told CNBC in an exclusive interview.
Still, Huawei has pushed ahead with consumer products. Much of its success so far has been down to putting out smartphones with new technologies but at affordable price points. It has been pushing the barrier with prices and also bringing in cutting-edge features. For example, the P20 Pro was launched earlier this year, boasting a triple-lens camera that retailed for just over $1,000.
Huawei also designs its own artificial intelligence chips which appear in its smartphones, much like Apple does.
For Yu, AI will be a key technology that will take smartphones to the next level and help the company grow in the future.
"AI is coming. AI will be the engine for all the future services. AI will be elementary to working on many devices, it will connect all the apps, you can get all the services from this AI capability. The biggest changes in the next 10 years will be AI-enabled phones capability," Yu told CNBC.
Huawei is working on a foldable phone which will debut next year and be the company's first 5G-enabled handset. Yu also told CNBC that augmented reality (AR) glasses are also in the works. The Chinese technology giant has not been afraid to jump into new consumer products including laptops and smart speakers. These new technologies could provide a growth engine for Huawei going forward.
But Huawei sees its future beyond hardware too.
The company has services such as cloud storage, music streaming and video content, which are little known outside of China. It's something the company doesn't talk much about but it claims Huawei Music, its music streaming platform, has 100 million monthly active users. For comparison, Spotify has 191 million.
Services have been a traditionally tough aspect of the business to crack for purely hardware players. While Apple has managed to create a multi-billion dollar business out of software and services — mainly because it owns the operating system that iPhones run on — rivals like Samsung have struggled because they rely on Google's Android.
For Huawei, it will be a tough battle, especially if it looks to internationalize any services, given the strength of companies like Spotify and Netflix outside China.
"Currently Huawei is primarily synonymous with being a hardware provider and it may find it needs to get its brand more established in consumer consciousness before it can make the transition to offering services too," Ben Wood, chief of research at CCS Insight, told CNBC by email.
"With so many well-recognized services such as Spotify for music and Netflix for films and TV already established with such a large number of consumers, it is doubly difficult for Huawei to grab share in these areas," he added.
"However, history shows that Huawei can be incredibly tenacious so I would not rule out the company slowly getting consumers outside China to embrace its service over time. That said, it's going to be a long tough journey," Wood said.
(from CNBC)