Huawei to phase out 80pc of low-end phones by end of year

11 Aug 2014

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Chinese smartphone manufacturer Huawei is attempting to remodel the company’s business plan by phasing out 80pc of its cheaper range of phones by the end of this year.

The cutback is expected to leave only a few basic models left in the company’s range as it looks to challenge both its Asian-based rivals, including HTC, Samsung and Xiaomi, in creating clearer business models, outside of the influence of telecom companies.

According to the Want China Times, which looks at Taiwan and China’s mobile manufacturing industries, Huawei wants to emulate the success of its fellow Chinese manufacturer Xiaomi, who through e-commerce has established itself as one of the largest sellers of mobile phones in the world.

Until now, Huawei has been reliant on telecom retailers or other retailers to sell its phones. According to its 2011 figures, 65pc of Huawei’s sales were made through telecom companies, with the remaining 35pc of sales made through other third parties. By going through its own e-commerce system, Huawei could reduce costs.

CEO of Huawei, Richard Yu, has said there needs to be a shift in thinking within the company, away from its past, whereby it had been pushing out phones to meet telecom providers’ demands rather than customers’ demands.

Despite this radical shift, Huawei has maintained good levels of growth, having shipped 34m units in the first half of 2014, representing a 62pc year-on-year increase.

Huawei store image via Shutterstock

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Colm Gorey is a journalist with Siliconrepublic.com

editorial@siliconrepublic.com