Smartphone Innovation’s Geographical Shift
This week I have been in London for the launch of the Huawei Mate 20, Mate 20 Pro and Mate 20 X ( you can find a great review here ) and as I played with the devices and listened to Huawei dive into their silicon and artificial intelligence as well as watch an AR Panda deliver Kung Fu kicks on stage, I realized that these were yet more phones US consumers would not be able to buy.
Some American consumers keeping up with tech news over the past few months might have concluded they do not want to buy phones by Chinese brands as they believe that Chinese vendors would be installing spyware on their devices. While I am happy to be proven wrong, I do think much of the recent debate in the US over Chinese manufacturers has much more to do with politics than technology. I am sure many of you have much more exciting lives than mine but even so, are they really interesting enough for a foreign government to spy on you?
For the majority of buyers who follow tech and look at the success of Huawei internationally, this concern is not top of mind and they would prefer to be able to have access to their phones through a carrier than jump through hoops to get it at full price from a third party not even optimised for some US cellular bands. Google’s presence on stage with Huawei in London adding the latest Mate 20 and Mate 20 Pro to their Android Enterprise Recommended Program should help with some of the doubts people have.
More Limited Competition
So what if this political environment will result in US consumers having less choice? The US market has always been a very hard market to get into. American carriers have always been quite demanding and over the years we have seen brands that were strong in other markets, like Nokia and Sony, fail or struggle to grow in the US. Huawei had of course tried to enter the US market before, both under the Honor brand and the Huawei brand, but sales were limited. Right when the Chinese maker was close to signing with a leading carrier, last year, the US government started talking about the danger posed by Chinese branded hardware.
One could argue, of course, that even if Huawei had a fair opportunity to get into the US market, they would find it as difficult as other brands have before them and they would fail. My argument here, though, is not about how successful Huawei would be, but rather how consumers would not have to miss out. Buyers would actually be the ones deciding Huawei’s success.
The Dynamic Nature of the European Mobile Market
In my days in London I was reminded about how much more dynamic the European mobile market is. This is due in part to the fact that it is of course made of many individual countries sharing many commonalities where vendors can enter and build their success story one country at the time. Huawei, like Samsung before them, saw its first success story in Italy and expanded from there finally reaching the UK too, a market that has been very much dominated by Samsung and Apple.
Carriers plans in Europe are more diversified than in the US with a prepay market that remains stronger than in the US and this drives different needs in terms of price points which in turn drives a more diverse supply mix. I also think that the mobile market has always been a bit more vibrant in Europe even before Asian manufacturers moved in. Back then it was about local players like Siemens in Germany or Sagem in France to name just two.
The US, on the other hand, has always been a more monolithic market where the gap between the top three or two brands and the rest of market players was way too big to be filled. Today some new names have entered the US market either online of through carriers but their volumes remain quite small. Some of these brands have their headquarters in China like OnePlus and TCL and one might wonder how long it might take for the political debate on China to impact them as well.
Getting back to the many faces of the Huawei Mate 20
What I think is interesting with the latest Huawei’s smartphones is that the company seems more comfortable talking about their advancements in silicon, particularly as it relates to artificial intelligence. Their capabilities have grown from two years ago at CES where I accused them of AI washing. Their camera technology shows the ability the phone has to detect not just what you are taking a picture of, similar to what Samsung, LG and others can do, but also to pick which one of the three cameras will take the best shot for you and offer that solution to you. The LG V40 that sports three rear cameras as well does not offer this option despite selling under the ThinQ brand which denotes AI capabilities.
It was a shame that during the launch event CEO Richard Yu felt the need to compare Huawei’s innovation to that of the iPhone so many times. Even when you are comparing yourself to what is perceived to be the best in the market you are doing yourself a disservice by limiting yourself to be judge by the parameters set in place by the one you are comparing yourself to.
The smartphone camera remains a big purchase driver for consumers and talking about AI in relation to the camera is easier as a “show and tell,” it is also compelling and maybe more importantly it is less scary for consumers than drawing attention to AI being able to text a reply for you or spot a robot call like we recently heard from Google on the Pixel 3.
Design, which has always been a strong point for Huawei, continues to serve them well as they try new colors and finishes and even iconic camera designs on the back. Huawei also started to deliver technology firsts like under screen fingerprint on a world-wide product or the reverse changing functionality both available in the Mate 20 Pro.
Huawei’s weakest link remains software in my opinion. And this is not because I would prefer that their phones shipped with vanilla Android rather than the Huawei EMUI, but because with some features they are more focused on delivering features for the sake of it than actually delivering value. Think for instance at the ability they displayed on stage to change any light in a given photo into a heart shaped light. Calling that AI belittles what AI really does in a product like the Mate 20 Pro.
I also believe that Huawei is well aware of this weaker software play and they lack confidence in taking ownership of the things they do well. Adding features because the market demands them even when other vendors offer them does not mean copying your competitors. Yet, if your delivery mimics those vendors then you do run the risk to be labelled as someone that copies competition. Samsung went through the same self discovery process and they are closer than they have ever been to define who they are and how they want to drive success going forward.
Delivery is also important when you want developers to take advantage of your features both hardware and silicone ones. Showing what looks like an app like the 3D calorie calculator when you are in reality only showing a concept of what is possible is disingenuous and does not help grow confidence in your brand. It was a real shame that Huawei did not take the opportunity that this week’s launch offered to tell its story and bring the audience on a journey of growth, not in market share,but in capabilities and ambitions.
The complexity of the Chinese market will continue to drive Chinese makers to move fast. For some players that might mean to be a fast follower but I feel there is more and more originality coming from vendors like Huawei, Xiaomi and OnePlus. Some players might be limited on what they can do internationally due to IP, some might be limited due to a lack of understanding of international consumers but it is a shame to think that protectionism might prevent some innovation to get to US buyers.