Huawei says Windows Phone is unprofitable and difficult: Report

Huawei says Windows Phone is unprofitable and difficult: Report

Summary: Making a profit and convincing consumers to purchase a Windows Phone handset is a difficult task, said Huawei's consumer business chief in an interview with The Wall Street Journal.

SHARE:

Do not expect to see any Huawei-branded Windows Phone handsets in the near future, as the Chinese networking giant has put a hold on any new releases using Microsoft's mobile operating system.

Richard Yu, Huawei's consumer business group chief, said in an interview with The Wall Street Journal that Windows Phone has proven to be unprofitable for the company, with development of new Windows Phone products "on hold".

"We have tried using the Windows Phone OS. But it has been difficult to persuade consumers to buy a Windows phone," Yu told WSJ.

Microsoft's mobile platform was not alone in receiving dismissal from the Huawei chief, who said that Tizen does not factor into Huawei's plans, despite receiving pressure from telcos to use the Samsung- and Intel-developed Linux variant.

"We feel Tizen has no chance to be successful. Even for Windows Phone, it's difficult to be successful," Yu said. "We have no plans to build our own OS. It's easy to design a new OS, but the problem is building the ecosystem around it."

Whereas Huawei is avoiding Windows Phone, HTC has re-entered the Windows Phone market with the HTC One M8 for Windows, which is currently exclusive to American carrier Verizon.

Figures from IDC earlier this month outlined the size of the challenge facing any mobile operating system that wishes to take on the Android and iOS duopoly. Between them, Google and Apple's mobile operating systems account for 96.4 percent of worldwide smartphone market share, with Windows Phone accounting for only 2.5 percent of handsets, down from 3.4 percent a year prior.

On the plus side for Windows Phone, it is able to hold market share, with Tizen looking to be permanently shelved by Samsung following a stalled launch of its Samsung Z handset in July.

Topics: Mobility, Mobile OS, Huawei, Windows Phone

About

Chris started his journalistic adventure in 2006 as the Editor of Builder AU after originally joining CBS as a programmer. After a Canadian sojourn, he returned in 2011 as the Editor of TechRepublic Australia, and is now the Australian Editor of ZDNet.

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

33 comments
Log in or register to join the discussion
  • Bring good models

    Huawei made a half-hearted, half-assed attempt and their models are ugly. No wonder they don't sell.
    Owl:Net
    • They do sell

      They are number 4, very close to Lenovo.
      I think they will do better in Europe and not so good in the US, as Europe is 90% android while US is "just" 60%, they might become number 3 soon.
      AleMartin
      • By the way

        Nokia is number 11 after HTC.
        AleMartin
  • Interesting comment from a phone salesman last weekend

    I was shopping around for a new smart phone, and was chatting to one of the salespeople. Most of the phones were Android phones (Samsung, Sony), although there were some iPhones and some Lumias too. The salesperson obviously felt obliged to mention the Lumias, but then dismissed then with the lacklustre phrase:

    "I have Windows on my PC at home, but I'm not having Windows on my phone."

    and went on to explain that they were an Android user themselves.

    I can only guess as to the motivation behind this comment.
    Zogg
    • What MS needs to do in the consumer market to succeed

      As I've said repeatedly, MS CANNOT rely on regular salespeople to sell Windows Phones. It has no choice but to rely on its own salespeople: salespeople dedicated to selling ONLY Microsoft products. Therefore having Windows Phone in operator stores should not count as being significant to MS. Unless there are salespeople dedicated to selling only MS Windows Phones in these stores, these stores should NOT be considered as real sales points.

      MS also needs its own media group. The only time the tech media is nice to MS in general, is when they perceive it, and Windows in particular, is in a decline. The last thing MS needs is for its image and product support, to be defined entirely by the tech media, most of which despises it when it is succeeding. A major reason kids have a great affinity for iOS and Android, is because of a lot of hammering on MS by the tech media over the years. The tech media is nicer now, because they see Windows and Windows Phone losing, and they particular loved Nadella, because he seemed bent on exacerbating the Windows and Windows Phone situation, by introducing Android into the MS' own mix.

      MS needs its own media group (federation of media outlets it has influence over) to define who it is, as well as its products and services. It also needs its own army of salespeople to sell products into the consumer market. MS needs to revise it online app store policies IMMEDIATELY, as this has inflicted the greatest harm on the Windows 8 ecosystem. MS' online stores should be dedicated to maximizing revenue for developers and MS, not for getting as many apps into app stores, irrespective of the economic ramifications of such actions. In fact, it is this near sighted view, which is undermining the number of apps in MS app stores. Finally, the Windows team should have as its motto, "the UI/UX of an operating system should always be tailored for the device it is on, and for the device's modality of use." Windows 8 should never have been made available for non-touch mobile devices, having a touch screen configuration.
      P. Douglas
      • What you say sounds nice... except for the added expense.

        MS is already losing money with WP. Adding sales people, and contracts for space (that "army of sales people") in existing stores will only increase the rate of loss.

        If MS wanted to improve the developers profitability, all they would have to do is drop the store fees from 30% to 20%.

        And finally "should always be tailored for the device it is on..." is exactly what Android allows, and is what is the source for the allegation that Android "fragmentation" is a failure.
        jessepollard
        • It shoudn't be hard to fix the problem

          Without salespeople dedicated to selling MS products, selling Windows Phone in any real significant numbers is a non-starter. I don't see what is the big deal with MS striking deals with carriers, to have a percentage of their sales staff only sell Windows Phones. The sales persons will get their usual base salary, plus their percentage of Windows Phone sales. MS may have to spend a little more money on carriers to sell the arrangement. Also having store in stores all over the place shouldn't be all that expensive, and should pay for themselves with increased sales.

          The biggest problem with MS app stores, is the prices for software. The prices cannot support software businesses, and the idiots running the stores who don't realize this, or don't care, should be fired immediately, and replaced with people who get this simple fact.

          "And finally "should always be tailored for the device it is on..." is exactly what Android allows, and is what is the source for the allegation that Android "fragmentation" is a failure."

          What are you talking about? There has been a desktop / mouse and keyboard tailored version of Windows since the 80s. It is just a matter of having Windows 8 include a desktop optimized configuration.
          P. Douglas
          • Android and Apple do not have dedicated sales people selling phones

            Except in Apple stores, you do not see dedicated Apple sales people. And MS ask has dedicated sales people in their MS stores. I have not seen any dedicated Android sales people either though I have seen dedicated Samsung sales people who try to sell everything Samsung. So the argument that you need dedicated sales people falls flat.
            GoForTheBest
          • For all intents and purposes, they do

            Smartphone salespeople are de facto iOS and Android salespeople. Hence the need for dedicated Windows Phone in carrier stores and other places, to counter the current situation.
            P. Douglas
          • If you need dedicated sales people, then it implies

            If you need dedicated sales people, then it implies the product can not sell by itself. Why do you say that smartphone sales people are de facto iOS and Android sales people? And why is that?
            GoForTheBest
          • The problem is, if they're supposed to work on commission

            what's their incentive to do so? WP8 has a reputation for being tough to move, so who would take the gig, unless they were solely on salary?
            Mac_PC_FenceSitter
          • I'm sure Windows Phone will sell fine if given a chance

            "WP8 has a reputation for being tough to move, so who would take the gig, unless they were solely on salary?"

            Hmm. I wonder where that reputation came from?

            MS really should give this effort a try, and have these salespeople call in periodically, so that MS can have a good idea what's going on.
            P. Douglas
          • For all intents and purposes, they do .

            Smartphone salespeople are de facto iOS and Android salespeople. Hence the need for dedicated Windows Phone [SALESPEOPLE] in carrier stores and other places, to counter the current situation
            P. Douglas
      • Second paragraph pretty much sums up their problem, not the media.

        With Ballmer at the helm, their strategy against competitors have always been tied to protecting "Windows". This was the case with the Phone, tablet strategy, which is why like alluded to, the UI/UX was such a screwup. Desktop UI on tablets, touch UI on desktop.

        Protecting "Windows" ecosystem was the number one priority, creating a killer product that can truly compete with iPads etc was secondary. Until that is flipped, they will continue to have problems. This is not the media but Microsoft making bad decisions and not believing in the products enough to stand strong behind it. Consumers are not looking for "Windows" on their consumption tablets, that's been proven time and time again, yet Microsoft tablet strategy is based around Windows ecosystem.

        Apple at a time went through one of the roughest struggles in history, but they did not blame the media, they just built great "lickable" products tied to great marketing. Thy had a CEO in Steve Jobs that understood what consumers want! And he was not afraid to cannibalize his own products either, as Apple has shown time and time again. Until Microsoft is deeding enough to do so they will continue to struggle in this post-PC era.
        dave95.
        • The media is a big problem

          What did Ballmer in, was his rededication of MS to Windows, and his reinvention of MS' mobile effort. This incensed the tech media which despised MS' hold on the computer industry for so long with Windows. The tech media simply zoned in on Ballmer's areas of weakness - the company's stagnant stock price, and MS missing out on mobile - and hammered away at Ballmer and MS, until Ballmer got forced out by investors.

          MS detractors are obsessed with getting MS to abandon Windows, because they realize it is so fundamental to the company's success. A reduced Windows is a reduced, irrelevant MS. The media loves Nadella, because he initially talked about an emphasis on cross platform services, and incorporating the use of Android into its products, all things which undermine Windows, MS' strength. If Nadella was ever to say that he is all about Windows, and demonstrated a revitalization of the Windows platform - something I wish he would - the media would try to have his head on a pike before long. MS could knock the wind out the media's effort, by establishing its own media group to counter them, and better get its message out to consumers - the kids in particular.

          There is nothing wrong protecting the Windows ecosystem. It is the heart of MS' operations. It is the most depended on product by MS' customers, partners, enthusiasts, etc. MS just needs to wake up to the fact that it needs to execute better on that, with its modernization efforts, and when it does, it has to counter the media and salespeople in the consumer space, which strive to undermine its effort.
          P. Douglas
          • "nothing wrong protecting the Windows ecosystem"

            No, nothing wrong with that. The problem arise when they start leveraging "Windows" into other markets where Windows doesn't quite fit in an effort to protect Windows. Like consumption tablets. For instance, Surface RT for some odd reason came with and was built around Windows, not their phone OS at the time. Billions in the red later where is RT today? Consumers have spoken, again and they prefer tablets that's an extension of their phone architecture and ecosystem rather than their desktop OS.

            Again, if you want to know how a company deals with negativity from the media, just look at Apple pre iPods and iMacs. Great products, great strategy, decisive CEO, great marketing trumps any negativity that may arise. Don't blame the media, this company have been coasting on Windows and Office for a long while now. Computing is now transitioning to more personal mobile post-PC devices and Microsoft/Ballmer panicked. They threw a hail marry in the end-zone with touch-based "metro" Windows when the game had just gotten started. Consumers rejected that, rejected Surface RT (billions in the red) and rejected Windows Phone (share declining).

            Maybe the problem is Windows, or its perception.
            dave95.
        • Ballmer's failing to my mind is more fundamental

          He failed to create an ecosystem inside MS that created great products.

          It's probably true already, but in a few years time, in business schools, they will illustrate "confirmation bias" by looking at Microsoft under Ballmer.

          The number of products (many that were mobile) that were innovative in concept but failed to "make it" under Ballmer are lengthy indeed.
          paddle.
      • you are missing zogg's hint

        windows is its own nemesis -

        "I have Windows on my PC at home, but I'm not having Windows on my phone."

        clearly, his experience with windows on the PC has alerted him to avoid windows elsewhere and if he had a choice, he'd probably lose windows on the PC too.
        GrabBoyd
        • That was certainly an inference I made, too.

          I also wondered whether prior experience with the "Windows" brand had alienated the salesperson to Windows phones, but I didn't press the issue - I was curious about what else they would say unprompted!
          Zogg
      • Far more difficult than it sounds

        Having dedicated salespeople is a bigger can of worms than you think.

        The simple solution is to have your own stores, like Apple does. And Bang&Olufsen. And many other high-end, high-priced, premium brands. If you're not one of those brands, it's very difficult to make money with your own stores. If it were easy, there would be Hewlett Packard stores everywhere.

        You can't just visit Best Buy headquarters and tell them you'd like to place some salesmen in their stores without them wanting something special... like exclusivity. Which is what they got. So now they have Microsoft Stores in Best Buys, but Microsoft can't have them anywhere else. The jury is out on whether these "stores within stores" are successful, but one thing is for sure: all brick-and-mortar chains are slowly leaking ships that won't last another ten years.
        Robert Hahn