Huawei gears up its consumer telecom devices biz in India

For 2012, the company is expecting to touch revenue of around Rs 1,911 crore

Huawei might be fending off concerns about its telecom equipment's with several governments across the globe, including India, but the Chinese telecom equipment manufacturer is silently gaining consumer mindshare in India.

For 2012 the company is expecting to touch revenue of $350 million (around Rs 1,911 crore) from its consumer business division alone. Of this it is expecting 30% to come from its mobile device business, 40% from set-top boxes and the rest from mobile broadband dongles or USB sticks. Globally its consumer business clocked revenue of $6.8 billion in 2011.

Unlike in its carrier business, where it is battling to convince governments about its credibility, the company hardly faces any such challenge in the consumer segment.

Huawei’s consumer business consists of three segments--mobile handsets, cloud services and chipset. The company has been present in India for over a decade and has been selling its handset as white labels to several telecom players, it was only last year that Huawei launched its products directly into the Indian retail space. Huawei has sales of approximately 3 million set-top boxes annually in India, and works with majority of DTH players. In the mobile broadband segment, where the company provides hardware for internet consumption (dongels), it claims to have a market share of 70%.

“In the consumer segment we have not faced any image related queries from retailers or customers. But what came as a surprise was that many did not know about the Huawei brand,” said P Sanjeev, Director Sales, Huawei Telecommunucations, India. The company which launched its handset only last year had sales of 500,000 smartphones. For this year, ending December 31, 2012, it believes the sales will touch 800,000. Globally it will ship about 60 million handsets by the end of this year.

To counter this perception, the company is working hard on its marketing and channel strategy. To start with it has targeted to increase its penetration in 35 cities in India. It’s channel strategy is divided into three segments. First, they have tied-up with Redignton as the national distributor. It has 34 regional distributors that target 1,000 top smartphone counters in India. Second it has tied up with all major large retail stores like Croma, Reliance Digital etc. And finally it is also using online retailer, such as Flipkart, to reach out to more consumers.

“By the end of this fiscal we will have 250 Huawei experience centres. Of this 40 are already operational. As a long-term strategy we are also building strong structure in terms of store presence and service centres. As of now we have 350 service centres in India. We have been working on this over the last year,” added Sanjeev.

Other than focusing on the retail and marketing strategy, Huawei is also planning to expand its portfolio. Today the company announced its foray into the tablet segment and announced the availability of seven-inch tablets called MediaPad 7, available for Rs 13,700.

It also announced the launch of Huawei MediaPad 10 FHD quad core tablets, though the pricing of the product was not unveiled. “The idea is to introduce a tablet that did not compromise on quality but was also affordable, and MediaPad 7 fits in that category,” said Anand Narang, Marketing Director, Huawei Telecommunucations.

In India, Huawei has a total of 6,000 employees, of this 3,000 are working at its research and development centre in Bangalore.

The company had revenue of $28 billion globally of this 75% came from overseas. Huawei clocked $16.1 billion in revenue in the first half of 2012 globally. Its devices business has been growing at a compounded annual growth rate of 40% since 2006.