Huawei: We don't build rubbish smartphones

Huawei is taking on big players with its Ascend Mate 7. (Duncan Alfreds, Fin24)
Huawei is taking on big players with its Ascend Mate 7. (Duncan Alfreds, Fin24)

Cape Town - Huawei has flatly rejected accusations that manufacturing smartphones in China means that the devices are of lower quality than rivals.

"Some of our tier 1 brand competitors are also manufactured in China. One just needs to turn the box over to see this," Yudi Rambaran, Huawei director of product marketing in southern Africa, told Fin24.

The Chinese electronics giant has been hit by criticism from many quarters, including the US government, that it manufactures devices with deliberate back doors to allow Chinese government agencies to hack in and steal secrets.

Huawei has been on a charm offensive to assure partners that include governments and resellers of its openness on cyber security and quality standards.

"Our manufacturing facilities are some of the best in the world and this is reflected in the quality of devices we produce. However, it is a challenge to change the perception, but as the leading ICT company in the world we believe we are on the road to changing this," Rambaran said.

Strategy shift

Part of the reason that Huawei has a problem is that it has a history of white labelling products like modems and smartphones, which have not always been as reliable as branded goods.

But the company has in recent times shifted its strategy to focus on its flagship smartphones such as the Ascend Mate 7 phablet and P8 smartphone.

It has also taken the fight directly to premium manufactures with specifications such as octa core processors, fingerprint reader and a 13 megapixel camera.

Watch Huawei managing director for the Device Business Group, Peter Hu, talking up the Mate 7 in this video:

"We address all the price bands starting from entry level with a $50 unit all the way up to a $1 000. Quality is not compromised in any of our price segments or devices as we have a competitive offer from a value perspective," Rambaran insisted.

Unlike market leader Samsung that has seen an erosion of profit, Huawei is on a charge. The company reported record net profit of $4.5bn at the end of 2014, up 32.7% year-on-year.

But the conglomerate is following others by diversifying its manufacturing.

Huawei, along with Xiaomi, are intent on producing devices in India. Manufacturing giant Foxconn is also building 12 factories in India as labour costs in China edge upward.

Local factory

But Huawei is not currently considering SA as a manufacturing centre as the company battles to gain market share on the continent.

"It is more than just a number of phones; it's proximity to research and development. Component sourcing has impacts on cost [of a factory]," said Rambaran.

Hisense has a TV factory in SA and Samsung is investigating a similar facility, and both companies have invested into the training of local labour for technology production.

Rambaran argued that local skill was one of a number of factors that would inform Huawei's decision to build smartphones locally.

"It is not about a shortage of skills set available in SA other factors need to be considered for local manufacturer."


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