Will Chinese Tech Giant Dethrone Apple and other IT brands in the US?
by Gary Cook
January 9, 2018
Huawei is seeking to crack US market, but lacks environmental credentials
Your bus shelter and web browser may soon be blanketed with ads promoting “The best phone you’ve never heard of”, heralding the arrival of a new smartphone that has finally come to town. Who is this mysterious “newcomer”? None other than Chinese IT giant Huawei.
Huawei, which is already the world’s third largest smartphone maker, announced this week at the Consumer Electronics Show (CES) in Las Vegas the arrival of its flagship smartphone, the Mate 10 Pro, to the U.S. market.
This campaign marks Huawei’s latest attempt to wedge into the U.S. market. Huawei already holds nearly 11% of the global market share in smartphone sales, following Apple (12%) and Samsung (22%). But in the U.S., Huawei has been unable to secure a distribution deal with major mobile carriers, and despite being available via Best Buy, Amazon and other retailers, Huawei has little to no brand recognition and a tiny market share to match. Even without the U.S. market, Huawei has made its way to 3rd place globally. Can Huawei gain a foothold in the U.S., displacing Apple as the world’s No. 2 seller of smartphones?
It’s possible, but there’s a clear flaw in Huawei’s plan. The company is going to struggle to appeal to environmentally conscious customers, particularly among the highly sought after millennial and younger generations, who are a critical market for premium smartphones like the Mate 10 Pro. According to public opinion research commissioned by Greenpeace, U.S. consumers are increasingly looking for sustainable, green smart devices. This trend appears even stronger among millennial, with growing evidence they are increasingly prioritizing the environment when they shop:
- For the third year in a row, millennials named climate change as the most serious issue affecting the world today, says the World Economic Forum’s Global Shapers Survey 2017. 78% of those who chose the issue said they would be willing to change their lifestyle to protect the environment.
- A Nielsen 2016 study found millennials are prioritizing sustainability when they shop, nearly 75% of millenial respondents say they’re willing to pay more for brands committed to positive social and environmental impact.
Yet Huawei is far from being one of those brands. Greenpeace recently called out Huawei on its poor track record on climate change and its heavy reliance on dirty sources of energy, giving Huawei a D grade in its renewable energy performance, compared to Apple’s A- for energy in the Guide to Greener Electronics, released October 2017.
Why did Huawei score so poorly? Only 1% of Huawei’s electricity consumption comes from renewable energy. Even worse, Huawei hasn’t set any concrete goals to procure renewable energy in the future. This lack of commitment is having a big impact on the atmosphere. According to Huawei’s own CSR report, its greenhouse gas emissions have almost doubled in the past five years, including a whopping 25% just in the last year reported, reaching 1,585,369 tons of CO2 in 2016.
Huawei is looking to become a global leader in PC sales as well, and has already entered the U.S. market. But with roughly half of the Fortune 500 having set climate change or renewable energy goals, can Huawei reasonably expect to displace enterprise sales of HP or Dell who have taken meaningful steps to reduce their climate pollution?
Huawei’s record on climate change stands in stark contrast with most U.S. IT brands, which have been leading the corporate renewable energy revolution across the globe. Apple, Google, HP, and Microsoft are all among the companies committed to 100% renewable energy. U.S. IT brands had procured over 7 GW of renewable energy over the past five years, becoming one of the largest drivers of renewables in the U.S. Apple has gone a step further, extending its long term goal to be 100% renewable to include not just its own operations, but its massive supply chain as well. In the short term, Apple has committed to deploy 4GW renewable energy worldwide to reduce the climate impacts of making its products, 2GW of which will be in China.
Millennials are committed to a renewable future, and are increasingly keeping score as to which companies are fighting to address climate change, and which are acting as if they have no responsibility. Huawei may be a newcomer, but unless it takes its responsibility for climate change much more seriously, it runs the risk for being known not for its innovative smartphones, but as a brand that’s stuck in a dirty energy past.