by Brad Moon | June 21, 2013 1:21 pm
Quick: Who makes the world’s thinnest smartphone?
It’s a beauty of a device wrapped in metal with a price tag in the $600 range, and chances are you’d guess I was talking about Apple’s (AAPL) iPhone 5. But I’m not. This device isn’t from any of the usual suspects: Samsung (SSNLF), Nokia (NOK) or even HTC or Sony (SNE).
This one’s the Ascend P6, a new entry in the premium smartphone market from a company you might not be familiar with: China’s Huawei.
Better get used to that name. Huawei is fast becoming a player in the world smartphone market, and according to a Canalys report on mobile phones, the company took third place among smartphone vendors worldwide in Q4 2012, behind Samsung and Apple. Joining Huawei in the top five were two other Chinese manufacturers, ZTE and Lenovo (LNVGY). While Chinese smartphone manufacturers are dominating the Chinese market — taking 73% of sales — they also are pushing into the North American and European markets, challenging the establishment.
I’ve written before about the threat that Apple and Samsung face from increasingly fierce competition in the smartphone market. These companies have seen enormous growth in their value, based largely on their domination of premium smartphone sales, where the best profit margins are. Chinese phones used to occupy the lowest tier, if they were available at all on U.S. shelves. They were cheap, plastic, generic looking (at best) and tended toward shoddy quality. That’s not the case anymore as these companies begin to aggressively move up market.
Take Huawei’s Ascend P6, launched in the U.K. earlier this week. During the unveiling, Huawei’s Consumer Unit CEO pulled no punches about his company’s target, quoted in Gizmodo as saying: “We want to compete with the iPhone 5 and the Galaxy S4, that is our goal.”
Big words, but the Ascend P6 is clearly built to be a contender. Besides taking the ultra thin crown (it’s 6.18 mm thick), it offers its metal case in three colors (black, white and pink), a 4.7-inch display and Android 4.2.2. Perhaps its most unique feature is a seriously pumped-up 5MP front-facing camera (competitors like Apple use just a 1.2MP camera). It includes facial-enhancing software that’s claimed to automatically reduce wrinkles and blend skin tones to reduce blemishes.
Huawei is targeting consumers who love to take their own photos — the infamous “selfie” — and post it on Facebook (FB) or Instagram. For this group, the thin and elegant Ascend P6 might be the ultimate phone.
Huawei’s own promotional material makes it even clearer which demographic the Ascend P6 is going after: women. The device is referred to as a “fashion smartphone,” it’s “small enough to slip into the tiniest of pockets or clutch bags,” offers “instant facial beauty support” and “embodies a cutting edge design for the fashion conscious.” Sure there are mentions of its gaming capabilities, but those are almost an afterthought.
Huawei clearly thinks its competitors have been ignoring female customers while playing up power, video games and other elements more typically associated with male buyers. Android smartphone owners tend to skew male (at least in the U.S.), so if you’re going to release an Android phone and want to make a grab for higher numbers, reaching out to that under-represented female demographic isn’t a bad strategy.
Is the Ascend P6 good enough to take on the iPhone 5 and Galaxy S4? When it comes to raw specs, Huawei’s new flagship falls short in many areas. Its display isn’t as sharp, it has 8GB of onboard storage (half the 16GB standard on the competition) and the launch version doesn’t support 4G (that won’t come until October).
But the Ascend P6 has the looks, it offers a premium experience and at $600 unlocked, it will be a hair cheaper than an iPhone 5. And despite any female slant in the marketing copy, the gender-neutral black and white versions look just as industrially attractive as anything else out there. It’s the latest example of smartphone manufacturers coming after Apple and Samsung with the models that just may be good enough to start eating away at their market share. There is no word on U.S. carriers yet, but look for it to hit this country sometime in August or September.
In case Huawei’s global ambitions weren’t lofty enough, there were rumors at the Ascend presentation that the company might just be interested in taking a run at buying Nokia. Whether this is a serious possibility or just idle chatter (according to All Things D, Huawei has said it’s “open minded” about the prospect), the possibility was enough to send Nokia’s shares up as much as 12% before the talk died down.
Whatever Apple comes up with in the fall — whether it’s an iPhone 5S, iPhone 6 or a cheaper iPhone for the middle market buyers — is more important than ever. Apple doesn’t just have Samsung and resurgent manufacturers like Sony, Nokia, BlackBerry (BBRY) and Google’s (GOOG) Motorola to contend with.
Even as Apple looks to China to grow its smartphone sales, Chinese manufacturers led by Huawei are coming after the iPhone on its home turf.
As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.
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