Wednesday, February 15, 2006

Vodafone Intros Huawei Cells

RED HERRING reports that Huawei has inked a deal with Vodafone to "make Vodafone-branded consumer 3G mobile phones across the 21 countries that Vodafone services" for at least the next five years. According to the article, it marks "Huawei’s first significant entry into the European cell phone market," and the first Vodafone-branded, Huawei-manufactured 3G phone model should hit store shelves in September.

Ben Wood at Gartner said the deal was “a huge step” for Huawei, and would most likely contribute to "the already-existing heavy downward pricing pressure on WCDMA-standard 3G devices made by major mobile phone manufacturers such as Nokia and Motorola."

Wood noted that "while Chinese phone makers are aggressive on pricing, the 3G phones being displayed at 3GSM by Huawei and other manufacturers," he said they still "have some way to go before they can really be considered competitive when it comes to form factor and functions. The biggest area they are missing on is design, given the huge focus by Motorola on design and fashion,. But one thing is for sure with the Chinese: they won’t stay behind for long."

Richard Windsor at Nomura pointed out that the deal with Huawei might be "an attempt by Vodafone to impose some degree of consistency of service across its many territories." He said this lack of consistency has been Vodafone’s "Achilles heel." Windsor added that "getting Vodafone's local operators on board is always a challenge," stating "It sounds fantastic, but the execution could be tricky."