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Crouching tiger Huawei ready to pounce on the West

by Dan Worth

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12 May 2011

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Huawei's headquarters in ChinaChina is continuing its relentless assault on the world's economy, and it seems only a matter of time before major companies in the region become household names in the UK, Europe and the US.

One of the first technology vendors from the region to enter the consciousness of the brand-saturated West could well be Huawei, which has been steadily growing since 1987 to become a major powerhouse in the networking and telecoms industries.

The company was founded by chief executive Ren Zhengfei with an investment of around £2,000 to act as a sales agent for private branch exchange (PBX) switches in the southern Chinese city of Shenzhen, home to other notable firms including legal rival ZTE and Apple manufacturing partner, the infamous Foxconn.

Since Huawei's humble beginnings, the firm has grown to employ 110,000 people across the world, producing everything from mobile network equipment to handset devices, but rarely appearing in plain sight.

Huawei is now keen to change all that by becoming one of the first major Chinese brands to become a household name in the West.

Part of this assault is a series of high-end premium smartphones running Android and possibly Windows Phone 7, building on its lower-end feature phones.

Pete Cunningham, principal analyst at Canalys, told V3.co.uk that Huawei certainly has the potential to become a major player.

"Huawei should not be underestimated by its more established competitors. Over the last couple of years it has worked hard to develop its operator relationships, and more latterly its device quality, both of which it has done successfully," he said.

Cunningham noted that Huawei has little brand awareness among end users which could slow its push into the high-end device market. However, the company could overcome this through advertising and pricing.

"It is now focused on trying to build its brand in the smartphone market, which is not a quick process - look at HTC. At the moment, due to the lack of its brand, competing in the higher price segments may prove difficult," he said.

"However, what may happen is that Huawei launches high-end devices at more aggressive price points. This approach, together with a significant marketing investment, may prove more effective."

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