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[Editorial] Huawei in Korea, U.S.

Chinese firms may dominate VR and drone biz

Huawei Technologies has unveiled its vision to overtake Samsung Electronics in five years in smartphone market share, after beating the world’s second-largest manufacturer, Apple, by 2019.

The Chinese electronics company grabbed the No. 3 spot in smartphone shipments at the end of 2015, posting 44.3 percent annual growth. It is also targeting a 30 percent increase this year, which would bring its 2016 sales to over 140 million units.

Some market insiders in South Korea might say Huawei is too optimistic, considering uncertainties in the information technology sector. Some still underestimate the firm’s technology status.

Even if downplaying Huawei’s prospects may still sound reasonable to ordinary consumers -- or Korean competitors -- there is a crucial factor that should be closely monitored in the coming months and years.

Huawei has huge growth potential in markets including the United States and Korea. While the firm has expanded its presence remarkably in the eurozone and China, the U.S. authorities have effectively prevented its mobile carriers from selling Chinese smartphones, citing cybersecurity concerns.

But the situation is changing, as Huawei, according to its senior executives, has been in negotiations with the U.S. on easing regulatory barriers involving tariff matters. It also began jointly manufacturing the Nexus 6P device with Google.

Samsung and LG Electronics need to pay attention to the pledge of Huawei chief executive Richard Yu during Mobile World Congress in Barcelona, who was quoted by a U.S. broadcaster as saying that the firm “will dramatically raise its market share in the U.S. in the coming years.”

In addition, Huawei is planning to release virtual reality headsets this year, heralding close competition with Samsung and Apple in the futuristic VR arena, into which the top two players are pouring huge investment.

While VR devices have been picked as the next-generation remedy to resolve the stagnant development of smartphones, local analysts agree the key issue is diversifying content, such as imaginative supplies for children and virtual sex toys, in coordination with software companies.

Apart from Huawei’s bold business vision, a noteworthy point in Korea is that consumers’ prejudice against Chinese products is rapidly waning.

More and more Koreans are expressing their willingness on social media to replace their Samsung, LG and Apple devices with Chinese smartphones. It is a marked difference, compared to just three or four years ago, when a dominant proportion of Koreans shunned Chinese IT products.

Many local users of Huawei devices say that they do not feel any particular disparity in ordinary performance with Galaxy series or iPhone handsets. They say the Chinese devices are highly cost-effective, and express satisfaction when considering their relatively cheap price tags.

Xiaomi, another Chinese smartphone powerhouse, is also moving to penetrate tech-oriented markets. Its initial sales in Korea were blocked early this year through the controversial suspension of its sales agent.

Starting from laptop computers to the current mobile devices, neck-and-neck challenge from China has become full-fledged in the IT sector. In addition, they are also competing strongly in segments such as fuel cell automobiles and drone businesses.