Fact: Huawei now outspends Apple on R&D

We told you the Chinese were coming. And all you did was make a lousy Watch.

Huawei HQ
Huawei headquarters...

Two years ago, Huawei was to premium smartphones what Datsun was to family cars in the late 1970s. Cheap and cheerful, and sometimes not all that cheerful. The idea (promoted here) that Huawei would be able to challenge Apple and Samsung was considered ridiculous.

“Samsung should be very concerned at what Huawei might be demonstrating in two to three years' time. So should everyone else,” I wrote at MWC 2014 – to general derision. Two years ago you couldn’t even get a 4G Huawei phone. And while the Ascend P7 was a design statement, it was still compromised: sluggish and with an obtuse UI.

But with the heavily promoted premium P9 now released, it's premium where it wants to be, says Richard Yu, Huawei’s consumer chief. Yu is aiming to displace Samsung from the No.1 spot and in an interview with the WSJ, says premium phones are where the growth is. It isn’t the best phone of the year – surely in the Android category the Galaxy S7s are the clear leader - and the P9’s Leica branding may be a gimmick. But it’s now proudly in the top-end segment: zippy, with a best-in-class fingerprint sensor, excellent signal reception, and all for £100 less. (£549 for the Sammy S7 SIM-free at Carphone, vs £449 for the P9 at Huawei’s online VMall, before promos).

You will find many reasons to find the Galaxy to be the superior device. Perhaps those reasons are worth £100. But one stat should be kept in mind by trendwatchers.

Huawei now spends $9.2bn a year on R&D. Apple spends $8.1bn.

For research this week, I spend a few minutes in an Apple Store watching the foot traffic. I chose Brent Cross, because it has a better mix of punters: with fewer media people, for a start. If you were to see the foot traffic on a time lapse video, the room would be a hive of activity, with a swirl of humanity. All but for one blank rectangle in the middle of the room – where nothing moved, and almost nobody went. This is the table showing off the Apple Watch.

Huawei has a flop watch too, of course (the design is much nicer than Apple’s effort, but it does just as little). But Huawei must really be thinking: “Long may you spend your huge R&D and marketing budgets on products nobody really wants, Apple. Go ahead. We’ll take it from here.” ®


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