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Huawei Looks to Break Into US Cell Phone Market

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The buying and selling of smartphones (and apps and accessories) is really, really big business in the United States. Huge business – to the tune of $12.5 billion in the first quarter of 2013. That’s $12,500,000,000. Apple raked in 57% of those profits, which might seem like an astonishing number, but it’s a lower percentage than in previous quarters. Most smartphone users (of which there are upwards of 114 million in the US alone) just go to Verizon or AT&T, talk with a representative, pick a phone, pick a plan, and go on their way. Phones can also be bought at retailers like Best Buy and from online retailers like Amazon, but that can take some maneuvering when it comes to the plan through the carrier.

Some are diehard Apple users, and there are certainly other brand loyalties, but for the most part, people just pick what they find appealing at the moment. They don’t take time to look at the jostling that goes on behind the scenes as smartphone manufacturers jockey for position in the market. One of those companies attempting to bust into the American market is Chinese company Hauwei.

Who is Hauwei?

The company is no small potatoes – it’s the second largest provider of network gear and is a huge telecom corporation. It has many international projects, including a partnership with Microsoft to provide exclusive smartphone service in Africa. It’s no surprise that Hauwei wants to break into the huge US market, where people buy new phones every 18 months – 2 years, which is one of the highest turnover rates in the world. This is probably because the main cell service providers like Verizon, AT&T, Sprint, and T-Mobile offer two year contracts.

As incentives to keep customers, they usually offer the phones at extremely discounted rates (or for free) if the customer renews their contract. Some offer an “early upgrade” option at 18 months for those who just have to have the newest gadget. Hauwei recently introduced their newest two smartphone models at a conference at Mandalay Bay. The phones got good reviews, so it’s off to the cell phone stores to trade in our old smartphones for even smarter-phones, right?

Wrong

Hauwei is not without controversy, especially in the United States. Hauwei has been involved in several scandals, including alleged espionage on behalf of the Chinese government and the selling of embargoed HP equipment to Iranians. However, the biggest concern that has kept it out of the American market so far are concerns over security. Of course, all of the teenagers with smartphones want to keep their crushes and secret texts with their BFFs secure, but the United States Congress expressed concerns that Hauwei products could be a threat to national security. Of course, Hauwei denied these claims, but they are still not faring well in the United States market.

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