Market Insight

[Display Dynamics] Huawei aims for 10 million TV shipments per year with many new strategies

August 04, 2020

David Hsieh David Hsieh Senior Director, Displays

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Key Findings

  • Huawei’s LCD TV shipments totaled less than 0.5 million in 2019. It plans to ship 1 million TVs in China in 2020, but its long-term goal is to reach 10 million shipments per year.
  • Huawei’s new strategy is called “1+8+N”, a 5G full-scene strategy.
  • With this new business model, Huawei intends to develop more OEMs, original design manufacturers (ODMs), or subcontract manufacturers that work for Huawei to enlarge its TV business.

In 2020, Huawei expects to ship 1 million TVs in China

Huawei launched its LCD TV in China under the HONOR Vision brand in the third quarter of 2019 (3Q19), but it was not very successful. Huawei’s LCD TV shipment totaled less than 0.5 million in 2019. Along with its HONOR TV, Huawei finally unveiled its self-developed open-source Harmony operating system (OS). In 2019, Huawei made it clear that Harmony OS was not meant to replace Android on smartphones, rather it works across various devices with a focus on security.

Huawei’s LCD TV shipments totaled less than 0.5 million in 2019. It plans to ship 1 million TVs in China in 2020, but its long-term goal is to reach 10 million shipments per year.

Despite the Huawei brand’s successes in the smartphone and 5G equipment markets, consumers are not recognizing Huawei’s LCD TV as a good choice among the many fiercely competing Chinese TV brands.

On the other hand, Xiaomi has been successfully penetrating China’s LCD TV market ever since it started its LCD TV business in 2015. Xiaomi shipped 13 million LCD TVs in 2019. In 2020, Xiaomi also introduced an organic light-emitting diode (OLED) TV to the high-end segment. Additionally, Xiaomi also successfully launched its LCD TVs in overseas markets, especially in India and South East Asia.

Xiaomi’s strength lies in its complicated displays, ODMs, OEMs, supply chain management, and its ability to leverage subcontract manufacturers to achieve the best balance of cost and performance possible in its products. These, along with the prestige of the Xiaomi brand, make it very welcome among new, rising consumers in China.

This has yet to happen to Huawei’s TV business.

Huawei is starting to reshape its TV business strategy. The following lists several critical aspects of its new strategy:

  • Reposition TVs as recreation centers at home as part of Huawei’s mobile and home entertainment ecosystem, especially under a 5G fast-transmission environment
  • Dual branding: Huawei and HONOR for different market segments
  • More diversified OEMs and ODMs
  • More diversified products and sizes along with multi-sourcing

Huawei’s “1+8+N” 5G full-scene strategy    

Huawei’s new strategy is called “1+8+N”, a 5G full-scene strategy as shown in Figure 1.

The “1+8+N” strategy can be interpreted as follows:

  • The “1” refers to a single Huawei mobile platform. This is mainly built into Huawei smartphones and is the core of the whole ecosystem Huawei intends to build.
  • The first “+” indicates Huawei’s “share”, which is the sharing mechanism equipped in all Huawei devices that enable contents and applications to flow.
  • The “8” refers to the eight new hardware consumer electronics devices Huawei wants to focus on. They comprise of augmented reality/virtual reality (AR/VR) glasses, smartwatches, automotives, handsets, desktop PCs, tablet PCs, smart speakers, and flat-panel TVs.
  • The second “+” indicates the 4G and 5G link, such as broadcast, over-the-air customer-premises equipment (CPE), router, mobile network, and communication devices.
  • The “N” refers to mobile offices, smart homes, sports and health, audio-visual media entertainment, and smart travel products, which include all kinds of Internet of Things (IoT) applications.

Figure 2 shows Huawei announcing its new “1+8+N” strategy.

Huawei’s TV business model     

Figure 3 shows Huawei’s new TV business model.

  • Dual branding with Huawei TV and HONOR TV: Both brands have separate sales teams but share the same management for their purchase department, R&D, and OEM/ODM makers.
  • Huawei TV and HONOR will target different brand positions and sales channels.
  • Both brands will be sold online.
  • HONOR’s TVs will be sold through Huawei’s HONOR in-store and out-of-store, which means Huawei will have its own retailer channel called HONOR.
  • Huawei’s TVs will be sold through Huawei’s in-store channel, which means Huawei will have another retailer channel called Huawei store.
  • Huawei TVs will also be sold through specially authorized shops and dealers. Furthermore, Suning and Sundan, two major TV and home appliance retailers in China, will sell Huawei’s TVs.

With this new business model, Huawei intends to develop more OEMs, ODMs, or subcontract manufacturers that work for Huawei to enlarge its TV business. Major shifts from 2019 to 2020 in the near future are noted in Table 1.

In 2020, Huawei—including its HONOR brand—will expand its product mix from 55-, 65-, and 75-inch to 50-, 55-, 65-, and 75-inch. In addition, BOE VT was, originally, Huawei’s sole TV OEM and ODM partner. However, from 2020 onwards, Huawei will expand its suppliers to include TPV and Changhong.

In 2021, Huawei will add 32- and 43-inch to its product mix and develop more OEM partners. Its long-term goal is an annual TV shipment of 10 million.

Research by Market
Displays
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