Huawei says third-quarter smartphone shipments jump 26 percent, strong demand for high-end devices

Reuters News
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Posted: Oct 23, 2014 4:14 AM

By Yimou Lee

HONG KONG (Reuters) - China's Huawei Technologies Co Ltd said third-quarter smartphone shipments jumped 26 percent year-on-year, doubling devices shipped to the high-margin premium market dominated by Samsung Electronics Co Ltd and Apple Inc.

Shenzhen-based Huawei, the world's third-biggest smartphone supplier after the dominant pair, shipped 16.8 million smartphones globally in the quarter ended Sept. 30, according to company data. About a quarter of those were mid- to high-end models, more than twice as many as the same period last year.

"We are breaking our bottlenecks of mid- to high-end models step by step, especially in overseas markets," Huawei consumer business group marketing executive Shao Yang told Reuters in an interview.

Huawei, like Chinese rivals Lenovo Group Ltd and ZTE Corp, is better known for selling low- and mid-priced handsets in emerging markets than high-end models in developed countries.

Industry watchers say that although Huawei's premium devices are cutting-edge, the company has struggled to break into the high-end sector markets like the United States due to a lack of brand recognition and security concerns. Huawei had 6.7 percent of the global smartphone market in the second quarter, a distant third behind Samsung Electronics and Apple, according to analysis firm IDC.

As if to prove a point, Huawei unveiled a smartphone with an advanced sapphire glass display just days before Apple released its highly anticipated iPhone 6 in September.

"We have never questioned our ability to make products, but sometimes we are worried if we could occupy a place emotionally in consumers' hearts. So we will try to achieve that next year," Shao said.

Huawei's global marketing budget would leap at least 30 percent in 2015, compared with $440 million this year, he said.

The company has shipped 51 million smartphones globally in the first three quarters of 2014 - about 63.8 percent of its annual shipment target of 80 million, according to Reuters' calculations, based on figures provided by Huawei.

Shao said he expected quarter-on-quarter shipments growth of up to 80 percent in the fourth quarter, a peak holiday season for smartphone vendors.

A little more than half of Huawei's smartphone shipments went to China in the third quarter. Elsewhere, the Middle East, Africa and Asia-Pacific recorded the strongest growth.

(Editing by Stephen Coates and Kenneth Maxwell)