“Psst. Get into laptops. That’s where the money is.”
Seriously, if you heard someone whisper that to you in a bar, you’d call them a taxi and tell them to lay off the bottle.
Huawei Technologies, though, isn’t drunk. A bit buzzed over its success last year in smartphones, sure, but the Chinese tech giant is as clear-headed as ever.
Its decision to enter the laptop market may be foolish, or it may be brilliant. Quite possibly it’s both. With the release of the Matebook X — a 13-inch, slim, fanless laptop — Huawei has a clear target market in mind, and it happens to be one of the demographics that’s showing signs of life.
Consumers still aren’t ready to return to PC purchases, but commercial customers are. Unfortunately for Huawei, its reputation as a Chinese government front — whether deserved or not — makes landing corporate accounts quite unlikely, especially in Western markets like the US.
But there’s a middle ground: high-end or professional users who are buying a PC for themselves, including small business owners. Industry data sometimes lumps these buyers in with home consumers because usually they purchase online or from High Street retailers.
If Huawei can capture this specific group in a broad array of developed market geographies, it may just be able to establish another beachhead from which to build brand recognition and help it become a global household name. The more Huawei logos you see at the local coffee shop or pitch meetings, the higher chance it will start to be accepted as a credible and trusted brand.
Whether the company can make money from laptops isn’t irrelevant, but is a less pressing question than it would be for a public company that’s answerable to shareholders every quarter (op. cit: Dell). It’s likely Huawei can spin a dime or two, though, because its huge engineering and product development teams give the company the scale to make a bet on a new business line.
And if you’re still not convinced, go back a few years to when no one took Huawei seriously in smartphones.
Cheers! — (c) 2017 Bloomberg LP
