(Just the day when I post my Episode 1, there were some latest news about Huawei, so I decided to write “Episode 2”)

The 2012 report is not the end of the story. Recently, Huawei introduced the first 4G TD-LTE network in Ghana and two new smart devices at the recent ITU Africa Regional Preparatory Meeting (RPM-AFR) for the WTDC-14 held in Accra, Ghana.[1]

After reading this news, I started thinking that although cost leadership contributes a lot to the success of intense competition, there are more factors that can lead Huawei to going so far.

According to my analysis, I came up with two reasons:

1. Differentiation. These years, Huawei is more and more focusing on producing “fablets” ( the word for the smart phone that almost as big as the tablet). Rather than copying iPhone, Huawei differentiated itself by producing bigger and better screen and better compatibility with different software (both Android and Windows).

2. Shareholders. As Ms Meng, the company’s chief financial officer said, most of the stake is held by the firm’s employees.[1] By providing the employees stake, employees are more willing to contribute more to the company, so that the co-operation becomes more efficient.

Lately, Huawei and Malaysian state investor Khazanah Nasional, will set up a data hosting and logistics center in southern Malaysia.[2] Facing this intense competition, Huawei responds actively. It’s building its own “Huawei Kingdom”.

References:

[1]Biztech, A. (2013, Oct 3). Huawei unveils 4g lte, devices at accra summit. Retrieved from http://en.wikipedia.org/wiki/Huawei

[2] KUALA, L. (2013, Oct 4). China’s huawei to set up data centre in malaysia. Retrieved from http://www.reuters.com/article/2013/10/04/us-huawei-malaysia-idUSBRE9930VT20131004

(With a great curiosity of the cell phone market, this time, After Apple and Xiaomi, I want to focus on Huawei. I am so curious of what would happen next in this battle field with an intense competition.)

A report that Huawei sold more smartphones in the last quarter of 2012 than either Nokia, HTC or RIM (the company that has just renamed itself BlackBerry) raised people’s eyebrows this year[1]. Also in this year, Huawei overtook Sweden’s Ericsson to become the world’s largest telecoms-equipment-maker[2]

Huawei Technologies Co. Ltd. is a Chinese multinational networking and telecommunications equipment and services company headquartered in Shenzhen, Guangdong. It is the largest telecommunications equipment maker in the world.[3]

Why can Huawei develop so fast and operate so successfully?

After carefully analysis, I notice that the main reason is—Cost Leadership.

Huawei succeeded in cost leadership. Comparing to Apple, Samsung, Nokia etc. Huawei’s cell phones are rather cheap (the ones with big touch screen are around $400[4]). By locating its manufactory and its services company in China, Huawei enjoys the wide labor market and lower cost of nature resources in developing country. Those things play really important role in cutting the expenditure of the industry.

References:

[1]Huawei clear as mud. (2013, Feb 2). The Economics. Retrieved from http://www.economist.com/news/business/21571180-chinese-company-sells-ever-more-smartphones-and-opens-up-little-clear-mud?zid=292&ah=165a5788fdb0726c01b1374d8e1ea285

[2]Chinese multinationals who’s afraid of huawei?. (2012, Aug 4). The Economics.Retrieved from http://www.economist.com/node/21559922

[3]Huawei. (n.d.). Retrieved from http://en.wikipedia.org/wiki/Huawei

[4] the price of the cell phone: http://consumer.huawei.com/en/mobile-phones/index.htm

http://mob.org/phone/huawei/