UK Consumers Cool on Huawei

The US government has been discussing its concerns over Huawei as a potential security threat for many months. It has also been urging other governments to curtail the use of Huawei infrastructure products in telecom networks.

The UK government has criticized Huawei for lax security standards in its infrastructure, but it has stopped short of banning its involvement in the new 5G networks. Further decisions are still pending, but most expect telcos to be allowed to use Huawei kit.

The publicity surrounding these discussions actually had a positive effect on sales of Huawei smartphones – its 1Q 2019 sales jumped 50% globally – likely due to raising general levels of awareness of the company.

Nevertheless, Huawei’s progress was dealt a severe blow by the US administration adding Huawei to its so-called “Entity List”, which prohibits Huawei from buying components, software, and services from US-based firms. The effect was immediate and dramatic.

More recently the US administration has appeared to soften its stance. But the easing is only partial and Huawei remains unable to use components and software freely.  In the light of these swirling developments, we conducted a consumer survey to understand its effect on UK smartphone consumers who were increasingly shifting their purchasing toward Huawei products, before the US ban was imposed.

Full results are available for subscribing clients, but the following is a brief snapshot of some of the results.

According to the survey, most respondents are aware of the action taken against Huawei by the USA – either in detail or more generally – with a wide variety of sources of information being used to understand the ban.

However, more than half the respondents think the action by the US administration against Huawei is either unfair or a borderline case and should not have been imposed. This feeling is highest in the age group of 26-35 years where almost two in every three respondents are in favor of Huawei with males overwhelmingly positive towards Huawei; much more so than females.

Over 40% of those who were interested in Huawei before the ban, are still considering Huawei/Honor for future purchases. Younger people and those on lower incomes form the majority of those still considering Huawei. This is borne out by our anecdotal research with channels which have seen sharp falls in sales of Huawei flagship models, but much less severe falls in sales of Huawei’s and Honor’s lower cost mid-range products.

Consumer Opinion About Huawei Ban


Source: Counterpoint Consumer Lens

Should the ban be lifted, many respondents would happily return to buying Huawei smartphones. However, continuing uncertainties about Huawei’s future was cited as the main reason for respondents being unlikely to consider a Huawei smartphone, even if the ban was lifted. This suggests that a return to the previous fast growth trajectory will be hard to achieve quickly.

Chinese brand image also came in the top five key reasons affecting consumer consideration of Huawei. This fact may also tarnish other Chinese brands that are not affected by any trade restrictions.

The main beneficiary though looks to be Samsung, thanks to its strong brand, broad portfolio and excellent distribution that is enabling it to cover the supply gaps left by Huawei.

The detailed analysis is available to all subscribing clients.