Samsung is on the retreat

Huawei's strategy for 2021: an understandable withdrawal

The trade dispute between the US and China has hit Huawei hard. It is therefore hardly surprising that a new direction in terms of consumer tech was presented during the HDC (Huawei Developer Conference) but no new smartphone.

As far as sales figures for smartphones are concerned, Huawei even overtook Samsung in the past quarter - but the manufacturer owes that primarily to the consequences of the corona crisis. Samsung's most important markets were hit harder than China - and Huawei booked 70% of its sales in the People's Republic. The manufacturer says the following:

"We have shown exceptional perseverance during these difficult times," Huawei told The Verge. "In a time of unprecedented global economic downturns and challenges, we can continue to grow and build on our leadership position by bringing innovative products and experiences to consumers."

However, no new smartphone was presented during the HDC - instead, Huawei would like to use the presented products to gain a lead in other product categories. The following were presented: the Huawei Watch GT 2 Pro, the Huawei Watch Fit, the Huawei Freebuds Pro and several Matebooks.

The Huawei Watch GT 2 Pro is in direct competition with Garmin and Polar. The Huawei Freebuds Pro are a flexible alternative to the Apple Airpods - they can be used across systems and offer an unbeatable price-performance ratio. Huawei follows the same approach as in the smartphone market: first-class features that underline that Huawei can develop premium hardware and helpful software.

Huawei proves that it is quite capable of producing first-class and innovative products in other product categories as well. AI technology is often used in the premium devices if it makes sense. The Huawei Watch GT 2 Pro is made of titanium, offers offline maps and can recognize and record more than 100 activities. And the AI ​​can even help you with golf shots. The earphones have a feature that works similarly to the optical image stabilization of a smartphone camera - it ensures that the sound remains constant even during sports.

The fact that no new smartphone was unveiled at HDC shows that Huawei has lost global smartphone competition. And although the manufacturer is now expanding its influence to other product categories as well, this move feels like a withdrawal. For the time being, Huawei will rely on the Chinese market and wait - otherwise the sanctions issue can hardly be overcome.
This strategy could well work. The new products remind consumers that Huawei is developing advanced and industry-leading products. In the meantime, the manufacturer will focus on exporting smartphones and building smartphones for the Chinese market with the surplus components that were sourced before the trade dispute.

What I still don't fully understand: Why can Microsoft deliver Matebooks with Windows if the smartphones are not allowed to get a GMS from Google?

The manufacturer makes it clear that it can still produce top notch products even though it had to give up its role in the smartphone market. I would have liked it if Huawei had introduced a new smartphone despite the US sanctions - if only to wipe out the US. But if you look at the overall situation, you can understand why that didn't happen.

Qualcomm is negotiating with Huawei to purchase Snapdragon processors. That could be the key to selling Huawei smartphones with GMS in the US - rumor has it that there will be news on this topic as early as September 15th. Should this actually become a reality, Qualcomm will secure first place in the global competition for smartphone processors.

We have already seen that Qualcomm does not shy away from taking advantage of its leadership position. In the legal dispute between Apple and Qualcomm, the verdict was that Apple had to pay the license fees owed - even if these are very high. However, the court ordered Qualcomm to reconsider its pricing structure.

No matter what you think of this verdict, if Qualcomm and Huawei actually close a deal, Qualcomm will be even more powerful than it already is. And monopolies are never a good thing.
Despite everything, I wish Huawei had presented a new smartphone - simply to show the innovations that market competition can bring about.

Namely, better products for consumers.