Huawei announced new products such as "MateBook X Pro" and "MediaPad M5" in Barcelona on the 25th. It was also revealed that "HUAWEI P20" will be announced on March 27th. Will those devices be released in Japan as well? We asked Mr. Wuha, President of Huawei Devices Japan / Korea Region.
Mr. Wuha, President of Huawei Devices Japan / Korea Region――This time, you announced "MateBook X Pro" in Barcelona. How is the sales situation of PC in Japan?
Mr. Wuha We have been developing the PC business in Japan for the past two years, but our products are a little off the mainstream, and we mainly provide 2in1 type products. For the past two years, we have been focusing on building relationships with PC product vendors, sales channels, distributors, and PC B2B associations. This time, we announced the MateBook X Pro, and it will be in the mainstream for the first time. By all means, we would like to establish our position in the Japanese market from this product.
――When is the release date in Japan likely?
Mr. Wuha Japan is in the first group outside of China and will be released in the second quarter. A presentation will be held in Japan before the release. We are still considering the specific timing internally.
--Nova2 has been released on au. How is this trend?
Mr. Wuha The current sales trend exceeds the expectations of us Huawei and au. Specifically, there are more numbers than the SIM-free model. However, I can't tell if it exceeds the iPhone because there is no data (laughs). I think that it will be possible to say how it was compared to the iPhone with BCN and GfK data.
――The P10 lite was also popular, but does that mean that the initial velocity will exceed that?
Thanks to Mr. Wuha, the P10 lite has been on the market for eight months, but normally the sales volume will drop six months after the new model is released, but the P10 lite is eight months old. Even now, it continues to increase. It feels like it's gaining momentum. It has been a double-digit growth rate since the beginning of 2018. Therefore, our partner companies are confident that the P10 lite will continue to sell. As for nova2, it is sold only at au shops, but so far it is doing better than SIM-free. It's better than the P10 lite.
――How about nova lite 2?
Mr. Wuha nova lite 2 is mainly handled by MVNO, but it is a product that seems to be a hit from the beginning. MVNO companies are also supporting nova lite 2. The image of nova lite 2 is that it is growing rapidly.
――The performance is similar, such as nova 2, nova lite 2, and Mate 10 lite, but are they sold well?
Mr. Wuha We have different customer needs, and I feel that we are responding to them with different products. Looking at the price, the lite series is also a little different. The nova lite 2 is in the 20,000 yen range, the P10 lite is in the 30,000 yen range, and the Mate 10 lite is in the 40,000 yen range, which covers the best-selling price range in the Japanese SIM-free market. Looking at the GfK and BCN figures so far, the best-selling SIM-free market is in the price range of 25,000 to 35,000 yen. However, there will be some changes in 2018. The hit price range is expected to rise to around 25,000 to 45,000 yen. The reason is that the most mainstream feature of this year's smartphones will be full screen. The 18: 9 aspect ratio will be mainstream. When it comes to meeting customer needs with this spec, I think the best-selling price range this year will be between 25,000 and 45,000 yen. So, starting this year, we're trying to cover this price range with the Mate 10 lite, nova lite 2, and P10 lite. The price range I'm talking about is the mainstream price range, with about 50% of the total.
――The smartphone brand has been recognized, but what about PC branding?
Mr. Wuha Smartphones and PCs are both electronic consumer goods, but their sales channels and customers are very different. Also, the Japanese PC market is quite unique compared to overseas, and there are two major differences. To give two 60% numbers, B2B PCs make up 60% of the total in Japan. And those over 15 inches make up more than 60% of the total. This refers to laptops and 2in1 PCs without desktops. To explain the uniqueness of the Japanese PC market, I always use these two 60% numbers in-house. The head office released a 14-inch product this time, but in fact, it is the result of listening to our wishes and considering the circumstances of the global market and balancing them. This is because 60% of all overseas PCs are 15-inch or smaller.
--A shop-in-shop has been opened in Akihabara. Will we continue to appeal in the form of smartphones, PCs, and tablets?
Mr. Wuha As you said, it does not mean that we focus only on products in some category. It's not just about smartphones and PCs, though it's not overweight. Of course, there are tablets, as well as OTT boxes, and we plan to develop a service called smart homes in the Japanese market in the second half of this year. There are various categories like this, but we will carry out branding activities comprehensively. What we want to convey to consumers is the message that Huawei will provide reliable, innovative and reliable products and services.
――Is that smart home service a cloud-based service that you have mentioned so far?
Mr. Wuha Yes, that's right. We also plan to develop cloud services in the Japanese market.
――Do you mean that you will realize the so-called HUAWEI Pay in the second half of the year?
Mr. Wuha That's right. It's okay to think of all this as a preparation for starting HUAWEI Pay.
--There was a customer service center until now, but what was your intention to create a sales shop at this time?
Mr. Wuha Actually, the only situation to consider when opening such a store in Japan is ROI. If the store is not profitable with the expected sales volume, it will not lead to the decision to open. For example, other manufacturers will open 10,000 stores in China and Southeast Asia at once, and will close half of them, 5,000 stores, next year. In that case, about half of the clerk will be restructured, so if we do the same thing in Japan, it is equivalent to dying. There is no particular reason for this, but it feels like the couple is about to get married, which is a very natural process. I think the love period was long (laughs). I started talking about this from the middle of last year.
――Is it possible to increase the number of stores of this type?
Mr. Wuha After all, whether or not to open a store is decided by ROI, so once a store is opened, I would like to continue it forever. We will not remove it in a few years. There is no particular timetable for how many stores will be opened by when.
――Although you have increased your market share in Japan, unlike overseas, I think it is a difficult market to capture, such as the strong iPhone. How do you see this market?
Mr. Wuha Actually, as the founder of our company, Ren Zhengfei, said, if our product cannot meet the needs of the Japanese market, it can be taken anywhere in the world. It doesn't work.
From my personal experience, I have worked in more than 50 countries, but I think the Japanese market is one of the most demanding countries for quality, service and innovation. Our goal is to survive in the Japanese market. The first thing to do is to meet the needs of Japanese consumers, and this is our goal.
In addition, there are many suppliers of parts with technology in Japan, so we have a wide range of cooperative relationships with these Japanese companies. We will deliver it to countries around the world by integrating it into our products through our platform.
--It was revealed that the HUAWEI P20 will be announced on March 27th. What will happen in the Japanese market?
Mr. Wuha Regarding the Japanese market, we will continue to launch it in the SIM-free market as a successor to the P10. We believe that the P20 is a product that brings a very innovative experience for Japanese consumers.
――Is it going to supply middle range products for carriers in Japan?
Mr. Wuha That's right. Hopefully it can be done. This time, au sells nova 2, and I would like to continue to do so.
--Mr. Richard Yu said that he will be the second largest in the world in a year or two. How will the Japanese market grow?
Mr. Wuha I can't say anything about markets other than Japan because I'm not under my jurisdiction, but I can talk about the Japanese market. What makes Apple particularly good in the Japanese market is that it takes the consumer's point of view and immediately reflects the consumer's needs in the product. Our corporate culture has shifted from ODM to OEM in 2011, and since then it has become a corporate culture that puts consumer needs first and consumer-centric. Since entering the SIM-free market in Japan, I always read the Voice of Customer (VoC) collected by my subordinates every day.
For example, the day before yesterday, we announced PCs and tablets, but there are already voices on the Internet in Japan saying "I like this place" and "I wanted this place." I just put it together and fed it back to the head office. One consumer said, "The M5 is very good, but it's a shame that it doesn't have an earphone jack." I organize these opinions once and send them to the relevant departments at the head office. I would like to listen to these voices and reflect them in the next product.
Especially in the Japanese market, I think that there were many cases where I was defeated by myself as a common case, rather than overtaking other companies. When it comes to the Japanese market, we will continue to have the goal of survival. We will respond to the voices of consumers as soon as possible and try to satisfy their needs properly.
--Are there any plans to sell MediaPad M5 in Japan?
Mr. Wuha will be released. I think it will be in the second quarter of this year. It will be around that time because I have to obtain certification for technical suitability.
--Will MediaPad M5 Pro come out? I think the MateBook X Pro also needs to be certified, but is it still in time for the first group? Will a Japanese keyboard be released?
Mr. Wuha First of all, regarding the Japanese keyboard, I have been talking to a Japanese company for some time. Regarding this MediaPad M5 Pro, there is a possibility that Japanese companies will be given the rights to make keyboard cases. It's important to meet your needs, but Huawei doesn't have to do everything. We can also work together with various Japanese partner companies to solve the problem. The MediaPad M5 Pro comes with a keyboard and pen, so we plan to sell it at mass retailers in Japan. I think I have to do something about the Japanese keyboard, so I'm looking for a solution.
I can't answer right now about the MateBook X Pro keyboard.
--thank you.
