BARCELONA: The smartphone industry is bound to consolidate as the heavy investments required to remain competitive mean that, in the long-run, only a handful of firms can make money, the consumer chief of China’s Huawei Technologies [HWT.UL] said on Sunday.
Huawei is the world’s third biggest smartphone maker, trailing leaders Samsung and Apple, with a 10.2 percent market share in the fourth quarter, according to market surveys from IDC and Strategy Analytics.
“In the future, only three to four vendors can survive, maybe only less than four,” Yu told reporters following a product launch event held ahead of the Mobile World Congress.
He said other, smaller Chinese vendors were consolidating, and most would disappear, as they did not have enough resources to invest in the same levels of research and development, marketing and branding needed to gain global scale.
“If your market share is less than 10 percent you cannot be profitable. Over at 10 percent, at least, you can break even (and) over 15 percent you can make money,” he said.
Huawei could become the second biggest smartphone maker this year or next, and sooner or later could be No.1, he said, speaking after his company unveiled a new notebook PC and two Android tablets.
The device will compete head-to-head with Samsung’s new Galaxy S9 – launched here on Sunday – and Apple’s iPhone X.
Looking ahead to next generation mobile networks set to roll out starting later this year in several major markets, Huawei also unveiled 5G versions of a consumer network router, its own chipset for phones.
Yu said Huawei will launch its first 5G-ready smartphone either in the third- or fourth-quarter, most likely in its Mate line of devices. —Reuters