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China's Huawei Speedily Ascends To Take On Apple And Samsung

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At the annual Mobile World Congress in Barcelona, Huawei introduced the world’s fastest smartphone.

Most Americans have never heard of Huawei.  Huawei is no small fry; it is a large Chinese company.  Its principal business is networking and telecommunications equipment. It has overtaken Ericsson to become the largest telecommunications equipment manufacturer in the world. It is also aggressively competing with Cisco in networking equipment.  It employees 140,000 people and operates in 140 countries.

Huawei is new to smartphones but has made great strides.  In smartphones, Huawei’s bread and butter has been providing white-label products to service providers.  According to the research firm IDC, in the last quarter of 2012, Huawei was third in smartphone sales just behind Apple and Samsung.

The new world’s fastest smartphone is named Ascend P2.    It supports LTE Cat 4.  Five different categories have been defined for LTE.  Cat 4 allows data rates up to 150 Mbps.

Speed is not the only virtue of P2.  It includes a 13 mega pixel camera with backside illumination and a capability to capture 1080p HD video.  It is powered by a 1.5 GHz quad-core processor.  The display is a 4.7 inch 720 pixel HD with a pixel density of 315 pixels per inch.

Huawei has a twofold strategy to take on Apple and Samsung, focusing on innovation and pricing.

Innovation

Huawei claims it is innovating to produce devices better than  Apple and Samsung.  Huawei is getting good at generating buzz.  Now it is generating buzz with the world’s fastest smartphone. Last year at the World Mobile Congress, Huawei generated buzz with its Ascend D model which was the fastest smartphone at that time.  (Please see  Huawei Hitting Apple Hard With Fastest Smartphone.)

Huawei also claims to bring special expertise in advanced power management to make sure the battery lasts all day.

Price

Ascend P2 will be available in the second quarter in Europe at 399 euros without a subsidy.  This is a significantly lower price than iPhone 5 and Samsung Galaxy III, even though the phone seems to have better specifications than the popular rivals.

The phone runs familiar Google Android Jelly Bean.  Therefore, many consumers will not hesitate to buy from a company they do not know well.  With such an attractive pricing strategy, Huawei is bound to take market share from Apple and Samsung.

Huawei is also at the forefront to introduce phones based on the new Firefox OS.  This will allow Huawei to reach users in less penetrated emerging markets who are just beginning to migrate from feature phones to smartphones.  This is an area where Apple is likely to miss the boat because all of these new users who will grow up with Firefox OS may never see a need to jump to Apple. For details of how Firefox OS may change the landscape for Apple and Google, please see Firefox OS Turning Up Heat On Apple And Google.

About Me: I am an engineer and nuclear physicist by background. I founded two Inc. 500 companies, and have been involved in over 50 entrepreneurial ventures. I am the chief investment officer at The Arora Report, which publishes four newsletters to help investors profit from change. Write me:Nigam@TheAroraReport.com.  Follow me here.  Subscribers to The Arora Report are long Apple from $131 and have already taken partial profits on 90% of the position.  Subscribers are also long Cisco Systems.