Huawei is considering manufacturing smartphones in Brazil

The Chinese tech giant may build an $800 million plant in Sao Paulo state over the next three years

Image by ekakika from Pixabay

On Friday, Sao Paulo Governor João Doria, stated that Huawei wants to build an $800 million smartphone plant to meet expected demand following Brazil’s first 5G spectrum auction (which is scheduled for March 2020).

Not a sure thing apparently…

But there is a reason I included “considering” in this article’s title. It doesn’t appear such plans are a sure thing.

“Depending on the performance of the smartphone operation in the local market, Huawei will consider building a plant in Sao Paulo in the near future,”

That’s what the official company statement said.

It’s good to note Huawei has been operating in Brazil for 21 years and has one factory producing telecom infrastructure equipment in Sao Paulo state. The production site employs about 2,000 employees; the upcoming plant could add 1,000 more.

The Brazilian mobile phone market

Brazil has a rather healthy mobile phone market. It has seen a revenue boost in the first quarter of 2019; yet research firm IDC reported a decline in the number of sold devices.

Revenue during such period reached 13.7 million reais ($3.5 million), up 8 percent versus Q1 2018, according to the report Brazil Mobile Phone Tracker. About 10.7 million smartphones were sold in Brazil during the first three months of the year, a 6 percent decrease compared to the same period in 2018.

The mid-level segment is actually booming: sales of smartphones priced between 1.200 and 1.699 reais ($308-$437) increased by 320 percent in the first quarter of 2019 (compared to Q1 2018). Sales for devices priced between 1.700 and 2.499 reais ($437 — $642), increased by 247 percent.

But but… the reality is Huawei has a minuscule footprint in the local smartphone market.

Mobile Vendor Market Share in Brazil from July 2018 until July 2019. Credit: statcounter, Fair Use.

Brazil is clearly a Samsung bastion; Motorola being a strong “number 2”. Even China-based Xiaomi has almost achieved a 3% market share.

In a way, that is not all bad for Huawei, in the sense there is definitely room for growth (especially in the mid-level segment where the tech giant excels).

Time will tell if those plans are really serious… 🙄

Image by Clker-Free-Vector-Images from Pixabay