And now focus on health and wellness! During the presentation of its latest novelties on Wednesday May 18 in Milan, Huawei, which had invited the media, presented these themes as the new pillars of its development for the years to come. Although it had already offered products in this area, the Shenzhen conglomerate has massively renewed its range of connected bracelets and watches.
Ceramic, titanium, sapphire glass… The most prestigious model, the GT 3 Pro, with a top price of 699 euros (720 francs), aims to match the Apple Watch, the market leader.
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In Milan, the Chinese brand also presented its new foldable phone model, the Mate Xs 2 (1999 euros). But it wasn’t really noticeable. Since the sanctions imposed by the US government under the Donald Trump era, sales of Huawei phones have plummeted. In question: the impossibility for its devices to use the Google application suite (Google Store, Gmail, Google Maps, etc.), a major obstacle for consumers.
The short-lived world leader (in the second quarter of 2020 according to the Counterpoint Institute) no longer appears in the ranking of major players, ousted by historical champions Apple, Samsung, but also its national rivals Xiaomi and Oppo. The prospects aren’t much better for the conglomerate’s historic activity — telecom infrastructure — which is also hit by US sanctions.
The latest annual results released by Huawei at the end of March illustrate this critical situation. Revenue fell 28.5% between fiscal 2020 and 2021 to $99.9 billion — nearly flat with 2017 levels — in all regions of the world, including China. On the bright side, however, net income in 2021 grew sharply to $17.8 billion.
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In this context, it is logical that Huawei is looking for other growth drivers, starting with the connected watch market. For Stéphane Curtelin, the brand’s marketing manager in France, “it’s an open and dynamic market” where barely between 10 and 20% of consumers are equipped and which is still growing strongly (+24% in 2021, according to Counterpoint). which puts Huawei already on the third step of the podium). The group wants to multiply the services: Health Plus for 7.99 euros per month, but also Huawei Music or Video. These paid services are one of the keys to the good results achieved by competitor Apple (18% of sales).
“Incredible resources and resilience”
But Huawei’s transformation doesn’t stop there. At the Mobile World Congress in Barcelona at the end of February, the company showed its ambitions in the professional world with PCs, tablets and screens. More recently he ventured into the energy (wind, solar) and automotive sectors despite the fierce competition in all these markets. It only remains to multiply the sectors, Huawei’s strategy seems less legible.
However, its R&D power is still impressive. The group invested $17.5 billion, or 22% of its sales, in 2021, the highest level in a decade. “They have incredible resources and resilience,” admits Thomas Husson, an analyst at Forrester. However, this underscores the brand’s difficulty in maintaining its image as a quality innovative company with the general public, especially as its marketing spend has plummeted. Huawei says it has long-term vision, but does it have the time?
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