Huawei's 5G carrier expertise will trickle into smartphones: Consumer VP

Knowledge gained through its carrier business, in addition to R&D work on 5G, will put Huawei in a better position to implement new network technologies into its handsets sooner, the company has said.
Written by Corinne Reichert, Contributor

Huawei's global carrier trials on 5G network technology, as well as its continuing investment in research and development (R&D), will put it in a "unique" position to implement new technologies into its consumer devices, Huawei has said, amid a push to expand its consumer business in Australia by building brand awareness.

Speaking to ZDNet, Consumer Business Group executive vice president Colin Giles said Huawei sees "great opportunities" across 5G, the Internet of Things (IoT), virtual reality, augmented reality, and artificial intelligence.

In particular, the fact that Huawei has a foot in both consumer and carrier businesses means that it will be better able to implement 5G features into its future devices than its competitors.

"For 5G, we have a clearly unique position because we have carrier, which has a very good understanding of what is required on the carrier side for 5G, and we can align that with how we integrate that into our smartphone products," Giles told ZDNet.

"We believe that that can enable a much more efficient communication between the smartphone and the network. But it also means that we're heavily investing in R&D around 5G capabilities.

"While a lot of that is on the network side, it spills over into smartphones as well."

Huawei's carrier business has been focused on 5G trials across the region; at the end of last year, it conducted a trial of 5G with Optus and with Japanese carrier NTT DoCoMo, followed by trials this year with Singaporean mobile operators M1 and StarHub.

Huawei has also invested in 5G research labs globally, such as the 5G Innovation Centre at the University of Surrey, which is looking into network slicing and network virtualisation, among other essential 5G technologies.

In terms of reaching into the IoT market, Giles said Huawei is already selling a range of smart home products in China under the Honor brand, and is conducting research into smart cities solutions through its "2012 Labs" across China, the United States, and Finland -- but is mainly focused on rolling out solutions to the automotive sector and speaking with carriers on opportunities.

"We have a number of cooperations with car manufacturers around the connected car and IoT," Giles said.

"The 2012 Labs is on the forefront of innovation for Huawei, and it's been very focused on all of that, including IoT and all other types of future technologies ... we certainly see that as an opportunity and we have ongoing discussions globally with carriers who are very interested in broadening their capabilities of IoT."

In addition to leveraging its knowledge from the carrier business to put it ahead in smartphone and IoT technology, Huawei is continuing to invest almost 15 percent of its revenue into R&D worldwide -- including through a new IoT lab in Australia -- and dedicating 45 percent of its workforce to R&D.

Some of its research on artificial intelligence, for instance, could be integrated into consumer devices to "enhance the utility" of products the company has currently, Giles said.

"We bring a high focus on quality, that's very much in the DNA of the company, and that's come from the success we've had in the carrier business and the credibility we've built in the partnerships with the carriers ... secondly, it's innovation," Giles said.

"So that demonstrates that we have a clear differentiator or a clear advantage in our capabilities to develop technology and to be able to innovate on that platform."

While Huawei is now the third-biggest smartphone vendor by market share globally and the biggest in China, with increasing momentum across Asia, Greater China, Latin America, the Middle East, and Europe, Giles said Huawei doesn't have the "consumer presence we deserve" in Australia.

According to Giles, this is because Huawei's Australian focus has largely been on enterprise and carrier until recently.

In order to build overall consumer brand awareness in Australia, Giles said Huawei is now leaning on these established carrier and enterprise partnerships, as well as the quality of its P10 handset following the success of the P9 last year, and relying on the large Chinese migrant population, which is already familiar with Huawei devices.

"We've been a little slower here in Australia, but on the back of P9 last year, which was our best-selling product -- and the Mate 9 broke all those records -- we feel now we've established all of the channels, we've got great relationships with carriers and also the retailers here, we've built credibility in the industry, and we're in the process of still building the brand but we believe that consumers here have a familiarity with the brand," Giles told ZDNet.

"We're number three in Australia, and that's a statement of our position."

This strategy includes emphasising Huawei's partnerships with Leica and Pantone on the P10 as differentiators from competitors.

"The best way to approach a market is to build a halo around the premium brand, the premium products. So on that basis, we will more heavily focus on P10 and on the back of that, enable us to build awareness of the quality and of the capabilities," he said.

"These types of initiatives around the P10 make it much more easy for us to demonstrate our value proposition to customers, so that's where we start, and then there is a halo that falls from that into the other products that we've got."

Drawing from his experience as the former head of Nokia for Greater China and executive VP of Sales at Nokia, Giles said he sees a lot of similarities in the challenges facing Huawei's growth in Australia that Nokia faced in the mid-1990s -- and that he is therefore confident of the brand's success.

"Nokia was in exactly the same position; we didn't have a household-name brand, people felt a little uncomfortable with the name, they didn't know who we were because we obviously hadn't invested, and it took time," he explained.

"It took time to develop Nokia. But because I had that experience previously, I have a lot of confidence in what we can do, and I see so much similarities in terms of the position we were in at that time, but also the approach that we're taking.

"If we reinforce the quality, we reinforce the focus on consumer experience, which is what we did, then I believe that we're in a very good position to develop the Huawei brand here in Australia."

Huawei Australia last month announced a net profit of AU$12.1 million on revenue of AU$673.3 million, up by 5 percent year on year.

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