The Consumer Electronics Show in Las Vegas has always been about drama. Most of it surfaces as (mostly) indirect jabs as companies aim to one-up each other in an endless technology footrace. On the other hand, Huawei has taken a more, for lack of a better word, traditional route by slamming US carriers during their scheduled keynote.
"Unfortunately, we cannot sell this phone through the carrier channels, but like last generation, we use the open market e-commerce channel. Everybody knows in the US market, it's 80, over 90% of smartphones sold are through the carrier channels," said Huawei CEO Richard Yu to a packed room. "Many people don't know about Huawei, we weren't selected by the carriers, and I think this is a big loss for us and for the carriers, but a much bigger loss for consumers because consumers don't have the best choice."
The meat of the keynote was truly about the Mate 10 Pro, a flagship competitor that is bezel-less, USB-C ready, and sports the Kirin 970 CPU, pricing at €699 ($824) for the Mate 10, €799 ($942) for the Mate 10 Pro. However, the underwhelming keynote carried over frustrations from Yu as he began to slam the likes of AT&T for pulling out of a deal last minute, a deal that seriously impacts the Mate 10's ability to hit the market.
It's possible that the deal might have been soured by Huawei's tight connections to the Chinese government, citing congress had "long been concerned about Chinese espionage in general, and Huawei’s role in that espionage in particular.”
Yu is upset for obvious reasons. The Chinese market has been absolutely killing it lately, competing indirectly with the U.S. market for the past five or six years and they are only getting stronger. However, short of a few retailers picking up no-contract phones and fulfilling online orders, it's impossible for consumers to get their hands on these phones. More importantly, Yu has been at Huawei for 25 years and has made a name for the once small Chinese start-up.
In a way, this was his big chance to elevate the company and it is being ripped from his hands by a picky U.S. market.
It wasn't too long ago that Yu was confident that "[Huawei] will sell our flagship phone, our product, in the U.S. market through carriers next year," he explained to the Associated Press. "I think that we can bring value to the carriers and to consumers. Better product, better innovation, better user experience.”
On the other hand, maybe Huawei doesn't have a lot to complain about. The Chinese government is infamous for shutting down foreign (read Western) tech companies in their own country, encouraging state-backed companies, such as Huawei, to flourish. Even Apple took two long years get their early versions of the iPhone through China's intense regulations involving Wi-Fi, third-party apps, and user data sharing.
At the end of the day Huawei, the second biggest tech company in a country populated by 1.3 billion people, is upset that they can't capture a market of 323 million.
Here is Yu's rough transcript of his five-minute rant at CES this year:
Partnership with the carriers... many of you guys have seen the newspaper that something has happened. Unfortunately, we cannot sell this phone through the carrier channels, but like last generation we use the open market ecommerce channel. Everybody knows in the US market, its 80, over 90% of smartphones sold are through the carrier channels. At Huawei, we have the best technology and the best innovations, and last year the Mate 9 got great consumer feedback, last year when we launched the product at CES, consumers really loved this product. The Mate 10 Pro is an even better product. Many people don't know about Huawei, we weren't selected by the carriers, and I think this is a big loss for us and for the carriers, but a much bigger loss for consumers, because consumers don't have the best choice.
And also, many people don't know Huawei. I've been working at Huawei for 25 years now, I've witnessed Huawei grow from a very small company up to the largest tech company equipment supplier in the world, not only the largest but also the strongest one. And also, I'm the guy that spun up Huawei's mobile network infrastructure and R&D, with one other person and myself. That was 24 years ago.
You know, all my memories, this is very difficult, because the first time we do a product we can't even get trusted by Chinese carriers because we are newcomers, always very hard. But we won the trust of the Chinese carriers, and we won the trust of the emerging developing market carriers we select. And also, we won the global carriers as well, European, Japan, the global carriers as well. Today, we are serving 70 million people worldwide, in 170 countries, and we over the last 30 years have proven are quality, we've proven our security, privacy protection, we've proven our good quality, innovation, the leading technologies and innovations. This is proven.
At Huawei, we are a company that has a spirit of working hard. Our founder and CEO Ren Zhengfei always said customer first. I remember that 25 years ago when I joined the company he taught us, firstly, customer first, customer first, customer driven, we are a customer driven company. And secondly, we really loved our work. We put huge money, technology, and innovation, we're working so hard for our consumer, our customer. We win the trust of global customers.
I remember 6 years ago when I started my job as CEO of Huawei Consumer buisness, our smartphone is nothing. Nobody knows us. Nobody knows Huawei's brand. 6 years pass, we are top 3 smartphone provider in the world, and we are quickly growing. And also, today, on the high-end, we win the trust of the global consumers, all the European countries, all the developing countries. So you can see that today. Our technology is getting stronger and stronger, so I have strong confidence that we have the best technology and the best innovation, we will be the best in the world. More and more in that respect, we are doing better, better, much better.
We are a company that is very simple, very transparent, very open. That's from the outside, very transparent. And we have pressure to do more. I believe consumers will select Huawei, carriers will select Huawei, they need Huawei. Huawei can bring more value to them, to the carriers and more importantly to the consumers and to the end users. Thank you.