This is an interesting one, but smartphone manufacturer, Huawei, seems to be swimming against the current and cutting down on the number of budget smartphones

Huawei to cut down on budget smartphones

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This is an interesting one, but smartphone manufacturer, Huawei, seems to be swimming against the current and cutting down on the number of budget smartphones it makes.

Want ChinaTimes reported that Richard Yu, Huawei Consumer Business Group chief executive, said the mobile phone maker will stop manufacturing some 80 percent of its smartphones geared for the low-end of the market. The company will retain a few low-cost models instead and channel more energy into branding and boosting margin. Huawei wants to boost its own direct retail channels instead of selling through network operators as it has done over the years. Many of the low-end smartphones that Huawei have made are customised variants at the behest of network operators.

While it may look like Huawei is swimming against the current, I think that it is good business sense to limit the number of budget models being churned out to a few, especially as it would seem that there only incremental differences between those devices. The vital thing is that they are still serving the low-end market.

Huawei mobile devices have been in Nigeria for a while and have been pushing hard in the market in recent times. The brand is yet to gain significant mindshare among smartphone users though. Globally, however, Huawei is the third largest smartphone maker.

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One comment

  1. good move. the race to the bottom might be good for consumers, but the profit margins on these devices are very lean and sometimes nonexistent. makes more sense to concentrate on the midrange and premium segments of the market since that’s where the profit is.

    Every OEM that made it’s name selling entry level devices (TECNO, Infinix, Gionee) is making moves to improve their devices and access the higher, more profitable segments of the market. the folks at Huawei realize that there’s no point in selling more devices and raking in more revenue than LG but having smaller profits due to leaner margins.

    Huawei already makes very good hardware, the P7 is a very good smartphone, so with some marketing, push into new markets and a little luck they could get a bigger slice of the upmarket profits.

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