Xu Chenghua, chief executive officer of Huawei Consumer Business Group, uses two P9 smartphones while taking part in a news conference in Shanghai. [Yang Lei/For China Daily]

Huge investment in innovation paves way for success of its P9 handset in the international market

Chinese tech giant Huawei wants Americans to start thinking of it as a stylish smartphone brand.

Huawei Technologies Ltd, which pulled out of the US market for network switching gear four years ago due to security fears, became the No 3 global smartphone seller last year, overtaking Apple in China. This year, it launched a new flagship smartphone, the P9, that it is positioning to compete with Apple and Samsung.

"China has yet to create a high-end consumer brand. We want to take that goal onto our shoulders," Eric Xu, one of Huawei's three rotating co-CEOs, told industry analysts at a meeting in April.

To do that, Huawei must succeed in the United States, the second largest market for handsets, accounting for one-sixth of global sales, according to industry analysts. There, it is starting with almost no market share.

"It is more difficult than any other market they have ever entered," said Nicole Peng of research firm Canalys. "I don't think they have concrete plans yet."

Outside the United States, the company is cranking up a global marketing campaign for the P9 featuring Hollywood stars Henry Cavill and Scarlett Johansson. For markets from Bangladesh to Mexico, it has recruited pop singers and football teams. It partnered with German photography powerhouse Leica to develop the camera on the P9.

The company has yet to say when it might sell the Android-based P9 to Americans or exactly how it will rebuild its US presence.

"We're definitely very patient with the US market," said Joy Tan, Huawei's president for communications, when asked how it planned to connect with buyers. "We hope these phones will be accepted by American consumers."

To meet its ambitious sales growth target of 30 percent a year, Huawei must increase its US market share to double digits from below 2 percent now, said Peng of Canalys.

It made a 36.9 billion yuan ($5.7 billion) profit last year on sales of 395 billion yuan ($60.8 billion). That was equal to just one-quarter of Apple Inc's sales, but Huawei spent $9 billion on research and development to Apple's $8.1 billion.

Huawei shipped 108 million handsets last year, the first Chinese company to pass the 100 million mark. That's a distant third behind Samsung Electronics Ltd's 325 million handsets and Apple's 231.5 million.

The company headquartered on a leafy campus in this southern Chinese tech hub adjacent to Hong Kong beat Apple and Samsung to market with a camera equipped with side-by-side lenses, one in black and white and one in color, that it says produces clearer images. The handset is slimmer than the iPhone 6s or Samsung's Galaxy 7 but its screen is bigger than the Apple's.