Huawei Smartphone Centre Should Give Nokia Chills
Huawei , the largest telecoms equipment vendor with a rapidly expanding presence in the handset market, announced it plans to double its European workforce and will invest to create a research and development (R&D) facility in Finland. The new R&D facility will focus on developing and optimising user interfaces (UIs) for both Google 's Android operating system and Windows Phone 8. BMI believes Huawei's investment has strategic value by capitalising on agglomeration of developers and smaller tech firms around Nokia 's headquarters - giving it access to a pool of human capital to raise its technological capacity. We believe the move is symbolic of the threat Huawei poses to Nokia and other handset vendors as it continues its expansion in the smartphone market.
Huawei has been expanding into the smartphone market as it diversifies from its roots as a vendor of telecoms infrastructure. It has already achieved considerable success with its line of devices both in its home market in China and in low- to- middle-income markets with mid-range and value devices utilising the Android OS. For instance, Huawei reportedly captured 45% market share of the Kenyan smartphone market in 2011 with its sub - US$100 Ideos X1 phone. However, it is also targeting the higher end of the market with quad-core devices that are viable substitutes for the flagship devices launched by smartphone market leaders such as Apple , Samsung , HTC , Nokia , Sony and Motorola .
BMI believes that investment in an R&D centre in Finland will increase Huawei's technological capabilities in a cost - effective manner, boosting its competitiveness at the high end of the smartphone market. Huawei plans to invest EUR70mn over five years to establish its R&D centre in Helsinki, hiring 30 staff initially, with plans to hire 70 further staff over five years. Over the same period , it plans to double its total European headcount to 14,000 across its 11 R&D centres . The announcement also reveals that Huawei is diversifying its smartphone products into a new ecosystem, Microsoft 's Windows Phone, although it is yet to launch a device .
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