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Huawei forced the millet to pull down Samsung
Huawei's smartphone sales, led by Ren Zhengfei, surpassed 100 million units last year, while Xiaomi fell short of its 80 million target. This disappointment left Lei Jun quite frustrated. Huawei remains optimistic about the potential to overtake Samsung as the market leader. What has been the key to its success?
The global smartphone market has entered a mature phase, with both Samsung and Apple experiencing slow growth. Meanwhile, Xiaomi, which had been growing steadily, started to show signs of slowing down. However, Huawei, which sold over 100 million smartphones last year, not only secured third place globally but also aims to challenge Samsung’s leading position in the coming years.
Huawei's Y6 model made a splash in South Korea, selling 20,000 units per week and setting a new record for Chinese phone sales in the region. Priced at just $127, the Y6 offered full functionality and quickly gained popularity among Korean consumers, who are traditionally loyal to Samsung. Previously, Chinese brands like Huawei accounted for only 1-2% of the Korean market, but this year, that figure is expected to rise to around 5%, marking a significant breakthrough.
In China, which represents 30% of the global market, Huawei performed exceptionally well. In 2015, Huawei captured 13.6% of the Chinese smartphone market, taking the top spot. Apple followed closely with 11%, while Xiaomi came in third with 10%. Samsung, once dominant with an 18.2% share in 2013, now holds only 7.7%, slipping to fourth place.
Beyond China, Huawei has made strong international strides. Last year, it achieved 108 million smartphone sales, becoming the third brand to cross the 100 million milestone in smartphone history. While Samsung sold over 300 million and Apple shipped more than 200 million, Huawei has focused on expanding beyond the mainland, entering markets like Spain and Portugal, where it now outperforms both Samsung and Apple. Huawei estimates that overseas revenue accounted for over 30% of its total last year, and this is expected to rise to 40% this year.
At CES earlier this year, He Gang, president of Huawei’s mobile product line, stated, “The 100 million mark isn’t much. We still have a lot of room for improvement.†He predicted that the next 100 million would be achieved faster than the first.
The smartphone industry is highly competitive, with many brands rising and falling each year. Experts suggest that Huawei could soon replace Samsung as the market leader. As early as May, Yu Chengdong, head of Huawei’s consumer business group, had already declared, “Huawei has the capability to surpass Samsung.â€
Huawei’s confidence stems from its unique competitiveness and corporate culture. It is the world’s largest telecommunications equipment manufacturer and has successfully transitioned into the smartphone market—a rare feat. Unlike companies like Yilixin or Siemens, Huawei has made significant progress in both sectors.
Ren Zhengfei, Huawei’s founder, emphasized the importance of technological depth, stating, “A phone only earns 30 pieces, not high-tech.†Huawei invests heavily in R&D, allocating over 10% of its revenue to research. Its human resource structure is designed for long-term innovation and quick market responsiveness.
In terms of mobile phone development, Huawei focuses on improving underlying protocols and semiconductor capabilities, while collaborating with global organizations on multimedia and camera technologies. By the end of last year, Huawei had filed over 76,000 patents, including 18,000 related to mobile devices, laying a solid foundation for independent terminal technology.
Huawei also places great emphasis on design, establishing design centers in South Korea, Japan, the U.S., France, and the UK. For instance, its fingerprint sensor design has influenced the direction of the entire smartphone industry.
While Huawei still lags behind Samsung in semiconductors and components, it excels in telecommunications equipment and has a strong presence in China and developing markets. With the rise of 5G, Huawei is well-positioned for future growth.
On the management and talent front, Huawei’s system and culture are robust. Ren Zhengfei implemented a rotating CEO system, allowing non-family members to lead the company. Employee equity ownership and innovative practices have attracted top talent and fostered a culture of continuous innovation.
Meanwhile, Xiaomi, founded by Lei Jun, has faced challenges. Although it exceeded 100 million shipments in one year, it missed its 80–100 million target. Lei Jun admitted dissatisfaction and shifted focus to “bold exploration†and “enjoying the fun of technology,†planning to enter VR and robotics through its new lab.
Xiaomi’s past success was driven by fan economy and online marketing, but with slower market growth, it struggles to maintain momentum. Its $45 billion valuation may be too high, and the company must find a new path forward.
In summary, Huawei and Xiaomi represent two different innovation models. Huawei embodies “thick innovation,†focusing on deep technology and long-term investment, while Xiaomi represents “thin innovation,†relying on fast-paced business models and creativity. Both face their own challenges and opportunities as the tech landscape continues to evolve.
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