(Chinese Version)

Yu Chengdong unveils Huawei Porsche Design’s pricing in China

Priced at ￥8,999, Huawei Porsche Design Mate9 is indeed challenging the pricing limit of China smartphone brands.

Mate9’s lowest-specs model is priced at ￥3399 while the highest one is priced at ￥5299. Huawei now covers all the price range of the high-end smartphone sector with its two Mate9 models.

If we were to say Mate9’s pricing couldn’t really match iPhone7 and iPhone 7Plus’s range, then we have to note that there is a Porsche Design model, which is even ￥1000 more expensive then Apple’s iPhone 7plus priced at ￥7988.

For Huawei, the price range of ￥3000 to ￥5000 is very essential. If Huawei could jump from the price range dominated by Apple with its Porsche Design model, then the company would have more opportunities in the market in terms of pricing.

Different from before, the Porsche Design model has shipment expectation. The Porsche Design international version is priced at over €1,300, which is different from the ￥8,999 in China. That said, the Porsche Design model is definitely not just a pretty phone. Huawei is betting on it to win over a proportion of the high-end market share. It’s quite smart for Huawei to use the Porsche Design model to test the waters in the high-end market while avoiding the price range of iPhone.

It’s apparent that Huawei is targeting the ￥3000 high-end market, but will it still be an unrealistic dream for Huawei to surpass Apple? Or Huawei will enter a new phase of opportunities?

First of all, Huawei does have accumulated a lot so as to enter the high-end sector. Huawei has been dreaming for this for a long time. Started with its Mate7, Huawei had already infiltrated the high-end sector. However, Huawei has never stopped trying to become something greater in the high-end market. Mate7 is actually the third phone model of the series. Before that Huawei had had products like D1, D2, and P1 etc. that were unsuccessful.

Yu Chengdong, Huawei’s Consumer BG CEO, has a few impressive speeches, one of which is “in the future there will be only three players in the smartphone market: Apple, Samsung and Huawei.” This has actually become something that people will just laugh it off. But the truth is today Huawei does appear to be gaining great momentum.

A few days before Mate9’s launch, Huawei announced that P9 has achieved a sales volume of over nine million. According to Yu Chengdong, P9 Plus, which is priced at over ￥4000, has the biggest sales. The supply couldn’t even meet the demand of P9 Plus.

Mate7’s success in the market only helped Huawei gain a foothold in the high-end market since this large-screen product that’s different from other products in the market did meet the demand of the Chinese market. In addition to that, Mate7 was launched during the period when Samsung’s new Note smartphone was still in development.

It’s know to everybody that Huawei’s traditional high-end series is the P series. Before P9 we already had P1, P2, P6, P7, and P8. Even though none of these models was able to make a hit in the market, but they kept on making accumulation. That’s why Huawei can continue to bring out better and more successful modes. The previous five generations were successful, but Huawei didn’t give up on it. The company continued to stick to the positioning of the P series: Light and fashionable smartphone designed for while-collar workers in the city.

Huawei P9 was rolled out with a dual-camera setup engineered in partnership with Leica, making the P series truly a high-end flagship of Huawei alongside with Mate. It’s a supplementary product for Mate that’s a large screen smartphone series with long battery life for businessmen. Huawei P9’s shipment volume during April and early November reached nine million, which is a recognition by the market.

These products from the Mate and P series had helped Huawei win over the ￥3000+ price range and laid the foundation for Huawei’s products to go higher.

Mate S, rolled out on the IFA in Germany last year in September, actually looked like the hybrid of the two series. It’s also priced at ￥4000+. It’s apparent that Huawei was already planning to make a breakthrough in this price range but didn’t find the right time to do so. That’s why the Mate8 launched at the end of last year wasn’t priced too high.

But the partnership with Leica found Huawei a way to go upward. Cross-sector cooperation will not only enhance the capacity of the product, but also bring more premium space to the brand.

It can be said that Huawei has made a lot of efforts to reach this point in the high-end market. It’s not a publicity stunt that Yu Chengdong made when feeling reckless. Huawei has been keeping up with this strategy and that’s what will drive the brand forward.

Besides, it’s known to everyone just how fierce the competition in the smartphone sector is, and being in such a cruel battle can really disrupt a company’s strategy. But Huawei hasn’t really made any strategic mistake in the market and does bring out well-received products.

When Mate7 was first launched, it was criticized for its weak camera. The camera has always been a weak spot for Huawei, but things started to change with Mate8. When the P9 came, this weak spot was then removed. The company teamed up with Leica and upgraded its camera module and algorithm, while bringing more value to Huawei P9 with Leica’s brand name. This cross-sector cooperation also gives Leica the chance to make its transition.

And this time, Mate9 has made huge improvement on the UI. Huawei is never the master of UI in the industry, which Huawei knew that all along. That’s why Huawei hired former UI designer from Apple to prepare for the big upgrade on UI.

On the press release of the Mate9, Yu Chengdong mainly focused on introducing th EMUI5.0. EMUI5.0 was upgraded in two dimensions, one of which is fixing the frame-drop problem for android users. Huawei has a team of 3000 professional talents led by several world leading experts in Linux and had it make deep optimization on the Android 7.0 system. The team then built the EMUI 5.0 based on machine learning.

EMUI 5.0 can analyze user’s behavioral pattern and adjust the phone’s resources(CPU and RAM) accordingly. It will allocate the resources to foreground applications and applications that the user frequently uses first. Accelerated simulation test of daily use and actual use test show that Huawei Mate9/Mate9 Pro can still be very fast and smooth after 18 months of operation.

The other dimension is the visual design. The new UI design was inspired by the Aegean Sea and is colored in blue and white. Compared with the previous UI, it’s simpler and more elegant. Users can expect to achieve 90% of the daily functions within three steps.

But of course, Huawei also has its own concern, that is the lack of competitiveness in the ￥2000-￥3000 range. According to the Q3 statistics from IDC, Huawei remains the top in shipment volume among Chinese brands. However, the statistics show OPPO and vivo are catching up fast. Huawei, OPPO and vivo had a year-on-year shipment growth of 23.0%, 121.6% and 102.5% respectively, with their market share growing from 7.6% to 9.3%, 3.2% to 7.0%, 2.9% to 5.8%.

As for the ￥2000～￥4000 range, Huawei has had a good performance in shipment, which is the main arena for OPPO and vivo. Huawei is getting its channels to the downstream and has launched Nova targeting this price range. Whether Huawei’s efforts will work out is really up to nova’s market performance in the coming quarters and the development of Huawei’s channels moving downstream.

Huawei is aiming for a height that no Chinese smartphone brand has reached before. So far Huawei doesn’t appear to suffer from great market risk and has maintained its position in the market. If the market really pays for the Porsche Design model, then Huawei would have more cards on the table that increase its chance of winning.

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[The article is published and edited with authorization from the author @Zhang Si, please note source and hyperlink when reproduce.]

Translated by Garrett Lee (Senior Translator at PAGE TO PAGE), working for TMTpost.