China's Huawei Technologies hopes its new contract-free smartphones will make a splash as it plunges into the U.S. market this year, reports said.
Although the company has sold 75 million smartphones globally, the United States is largely an untapped market, the Wall Street Journal reported. Huawei ranks fifth globally and has a 5 percent market share because it sells unlocked devices online instead of dealing with middlemen.
Huawei hopes that the contract-free phones will become more popular, rather than the usual "bundled" smartphones purchased through a carrier. Ninety percent of U.S. consumers buy a bundled smartphone, a stark difference from China, where only 40 percent buy bundled phones. Huawei's smartphone, Honor, will be sold later this year in the United States.
The Honor's appearance comes at a tough time for Huawei, which must compete with powerhouses such as Apple and Samsung. Huawei can't compete with their marketing budgets, so it will likely be using digital advertising.
“If you look at the U.S. market, it is unique in that all the competitors are here,” Xu Zhiqiang, president of Huawei’s U.S. devices business told the Wall Street Journal. “I don’t think it’s sustainable for all these players to be here. A lot of them will disappear…But we will be here.”
We're all for more competition in the smartphone market, but we don't know if Huawei's contract-free smartphone is enough to make consumers buy it. It will likely depend on price, features and technology. If it can come out with a fast, user-friendly, well-priced and sharp product, it will likely do well.