Huawei’s Extravagant Expenses

Huawei has proved its mettle in the smartphone market as it secured the second spot recently in terms of total sales. This is no minor feat considering its competition with the likes of Apple, Xiaomi, Oppo, OnePlus and Vivo. Most of these players mostly focus on their smartphone business. However, Huawei is the world’s largest telecom equipment supplier and gear manufacturer, which makes them one of the largest global companies in the technology sector.

Mr. Martin analyses in his YouTube channel TechAltar that Huawei is not expecting to earn profits from its smartphone business, not at least in the near future. The company’s aim is to penetrate as much market as possible in order to make their name known to the consumers.

They have also started manufacturing laptops a few years ago. It has been seen that the advent of smartphones killed the laptop market but since 2017, it has again gained popularity among the users. A smartphone performs almost all the tasks shot at it or even more as compared to a laptop but there are certain drawbacks. Laptops, even if they are significantly larger than the largest smartphones, have a huge screen, a full mechanical keyboard, numerous ports and so on. These added advantages of laptops make it a much more viable option. Huawei’s move into the laptop manufacturing shows their eagerness to capture the end consumer market.

The overall reputation of a company is one of the important factors in order to get its products sold in the number. Huawei has been closely associated with the Chinese government for a long time and this has played against its reputation especially in the western world. The strife between the east and west is currently led by the US and China.

The USA banned its government sector from using Huawei and ZTE products starting from network equipment to smartphones and laptops. Huawei, on the other hand, is constantly making efforts towards making a good impact upon the psyche of its current and potential customers.

Apart from selling good quality products at a reasonable price, making good advertisements and high profile celebrity engagement seems to be Huawei’s way to the glory. In recent years, Huawei has been constantly engaging with the A-list celebrities for their product endorsements. Currently, their global brand ambassador is the world famous Gal Gadot known for her role as the Wonder Woman. In the past, they have been associated with the likes of Lionel Messi (Footballing legend), Henry Cavill (Superman in the DC Universe) and Scarlett Johansson (Black Widow in the Marvel Universe). These names need to introduction to the global audience, as they are a brand in themselves and larger than life personality. They have a huge impact on the consumer consciousness. Since India is the second largest smartphone market in the world, Huawei considers it one of the important market for future growth. In India, ace shuttler Saina Nehwal was roped in by Huawei to be their brand ambassador. The company is performing well in the market with its growth rates rising over the years.

A rational consumer might not be swayed away by the fact that his/her favourite footballer/actor/actress is endorsing a particular brand but at the back of the mind, it certainly helps the brand. Engaging a globally adored celebrity helps create a sense of reputation for Huawei and they are spending a fortune on this kind of advertisement in order to make a mark on the consumer market. Affording these huge expenses is no big deal for the Chinese giant as they have other established businesses to set off the

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