Yesterday, we reported that LG's mobile division is having a bit of a rough time; sales of its latest flagship, the LG G6, are not as good as expected. With one of the most recognizable global smartphone brands having such issues, you might expect that other smartphone companies are experiencing similar struggles. Chinese OEM Huawei has just announced its H1 business results, however, and they're anything but disappointing.
Huawei Consumer Business Group, the home of Huawei's smartphones, tablets, wearables and PCs, reported that its H1 revenue has increased by 36.2% year-over-year, totaling CNY 105.4 billion (around $15.6 billion). It has also shipped 73.01 million smartphone units, which is a 20.6% increase from the same period last year.
Huawei retained its number three spot in global smartphone market share, with approximately 10% of all shipments in Q1 of this year, according to research company IDC. This marks significant growth from the 8.4% it held in the first quarter of 2016.
While there are no doubt many factors behind this growth, Huawei's approach to manufacturing likely plays a big part. Huawei is one of the few companies that actually takes the majority of its manufacturing process in-house, complete with its own Kirin chipsets. This allows it to launch premium handsets for a much lower price than its competitors.
Additionally, the company doesn't sell phones in the US but instead targets smaller markets that are less competitive. Other than holding 22.1% of the Greater China market, Huawei also saw an 18% year-over-year growth in Central, Eastern, and Nordic Europe — markets that aren't dominated by high-end devices.
Another factor that probably contributed to Huawei's success is the popularity of its Honor brand. Under the Honor name, the company is selling high-quality, yet affordable, mid-range phones that house a plethora of premium features. The latest device in the line, the Honor 9, comes with very similar hardware as the high-end Huawei P10, yet it's about 30% cheaper — making for a phone that has plenty of bang for its buck.
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This aggressive pricing strategy, paired with the solid hardware offered by Huawei — and a big marketing budget — has helped bring the company a ton of loyal customers. Huawei was placed 49th on BrandZ's Top 100 Most Valuable Global Brands, 88th on Forbes' World's Most Valuable Brands, and 40th on the Brand Finance Global 500 Most Valuable Brands. That's still way below Apple and Samsung, but according to Forbes, the Huawei brand has increased its value by 9% in the last year alone.
Of course, these are just some ideas: what do you think is the secret to Huawei's success? Let us know in the comments.
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