Saturday, 11 January 2014

A long way for China's Huawei, ZTE & Lenovo to reach Samsung's status in US - Economic Times

LAS VEGAS: LG Electronics executive Frank Lee bounded onto a Las Vegas stage this week to show off a new phone for the US market, the 6-inch G-Flex, which boasts a curved screen.

Two hours later, in another room at the same hotel, Huawei Technologies' Richard Yu unveiled the razor-thin Ascend Mate II, bragging it had a battery life of nearly two days.

There was one key difference between the two product launches at the Consumer Electronics Show: the South Korean G-Flex will be sold through three US carriers - T-Mobile US Inc, AT&T Inc and Sprint Corp. The Chinese Ascend Mate II? None, at least not yet.

In two years, China's three biggest handset makers - Huawei, ZTE Corp and Lenovo Group Ltd - have vaulted into the top ranks of global smartphone charts, helped in part by their huge domestic market and spurring talk of a new force in the smartphone wars.

Chinese companies took up more showspace at CES than ever before, eager to tout their products to the world's largest electronics market. Still, analysts said it will likely take years for the Chinese to make headway in the United States, where arguably the only Asian brand to have succeeded is Samsung Electronics Co Ltd.

Aside from their struggles to get onto store shelves - US carriers sell nine-tenths of the country's handsets - Chinese handset makers continue to grapple with low brand awareness, perceptions of inferior quality, and even security concerns.

"The talk last year was premature," said Frank Gillett, an analyst with Forrester Research. "It's one thing to have the product. It's another thing to have all the relationships, build the distribution channels and do the marketing.

"We'll maybe start to see things kick in in 2015."

In the third quarter of last year, ZTE and Huawei accounted for 5.7 per cent and 3 per cent of all phones sold in the United States, respectively, trailing Apple Inc's 36.2 per cent and Samsung's 32.5 per cent, according to IDC.

While Samsung was able to use Google Inc's Android software to offer a viable rival to the iPhone, that path now is too well trodden with many brands offering Android phones.

"It's a tall order to climb into this market and gain significant share now, simply because they're coming in after habits are established, technology is established and brand names are established," Gillett said.

THE CHINESE ARE COMING

It's not for lack of trying. Karen Chupka, one of the organizers of CES, said more than 1,800 Chinese companies turned up this year. She did not provide a comparison.

Huawei and ZTE occupied prominent - and pricey - positions at the center of one of the cavernous halls. Huawei said it doubled the size of its booth in two years, and even parked a Mercedes sedan on the floor to attract participants.

For Huawei and ZTE, the push into handsets came amid a general slow-down in their bread-and-butter business of selling networking equipment to telecoms companies.

Frustrated by accusations on Capitol Hill that national security would be compromised if Chinese networking equipment were installed in the United States, they have sought to double down on handsets for American consumers instead.

Copyright © 2014 Times Internet Limited. All rights reserved.



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