Huawei drops Windows Phone citing lack of profit

Huawei said it was dropping support for Windows Phone and cited lack of profit as the main reason. The Chinese manufacturer has taken this decision while the troubles between Microsoft and the Chinese government continue to pile up.

Huawei, who has been a tentative supporter of Windows Phone, and has launched two devices running Microsoft’s OS, said it would be putting future such devices on hold. The company explained that lack of profitability due to low sales was driving this decision.

Richard Yu, head of Huawei’s business group talked to the Wall Street Journal and explained:

We have tried using the Windows Phone OS. But it has been difficult to persuade consumers to buy a Windows phone. It wasn't profitable for us. We were losing money for two years on those phones. So for now we've decided to put any releases of new Windows phones on hold.

Windows Phone has seen its number of OEM partners increase dramatically over the past few months and there is some indication that the platform is finally ready to take off. However, if more partners reach the same conclusions that Huawei did, then the future is by no mean bright for Microsoft’s OS.

This latest development comes amid high tensions between Microsoft and the Chinese government who has accused the company of unfair business practices and spying on the government. The Chinese government has banned Windows 8 from its PCs and is trying to develop its own custom operating system.  

Source: Wall Street Journal | Image via Huawei

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30 Comments

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The got a little Press when their handsets had coloured capacitive Keys.

And that's about the last that was heard of their offerings.

Really microsoft should just give out coupons with massive discounts on the latest Samsung or Apple phone and call it a day, this WP debacle/failure will be long and drawn out and full of endless denial.

vcfan said,
the other 23 or so oems who signed up to make windows phones won't be too sad.

We've heard that before. How many major OEM's have actually produced Windows phones?

If Microsoft, who sells 90+% of all WP's, makes a loss, how can anyone else make money?

prestigio,hi sense,allview,micromax,celkon,blue,obi, htc, have already produced windows phone and are already in the market or about to go on sale this and next quarter. there are many more,just the ones ive heard about or remember off the top of my head.

vcfan said,
prestigio,hi sense,allview,micromax,celkon,blue,obi

I said major OEM's. I've never even heard of half of these.

vcfan said,

have already produced windows phone and are already in the market or about to go on sale this and next quarter. there are many more,just the ones ive heard about or remember off the top of my head.

So basically, no new major OEM's. And ones that were supporting it, are leaving due to lack of profits. Which isn't surprising considering that the low-end makes up most of WP's sales. Microsoft can't even make a profit on it even though it dominates 90% of the market.

LG is going to release windows phones, Samsung and Microsoft settlement calls for more Samsung windows phones, htc just released a flagship, Lenovo is releasing windows phones, and acer and sony are in talks with Microsoft to release windows phones.

Edited by vcfan, Aug 26 2014, 5:03pm :

vcfan said,
LG is going to release windows phones, Lenovo is releasing windows phones, and acer and sony are in talks with Microsoft to release windows phones.

I'll believe it when I see it. LG and many others have been WP partners for years without ever releasing phones. They'd be stupid to waste money doing so.

simplezz said,

I'll believe it when I see it. LG and many others have been WP partners for years without ever releasing phones. They'd be stupid to waste money doing so.

nice try trying to paint it like oems are deserting windows phone, au contraire, the amount of OEMs signing up to windows phone is substantial,and growing every day.

LG D635
https://twitter.com/ailon/statuses/492665898441125890

and this is a good read too
http://www.neowin.net/news/is-windows-phone-about-to-go-big

vcfan said,
aww too bad for Huawei, the other 23 or so oems who signed up to make windows phones won't be too sad.

No they won't be too sad when they drop Windows Phone too. The writing is on the wall.
Mark my words, all data points the the HTC One M8 Windows device being a huge flop for Microsoft and HTC.

Well I certainly would have never considered a Haheaiwei phone even if they paid me to use it. It's Chinese and they are not being transparent.

Type comment here...

Windows Phone is just one failed component of MS' overall failed mobile strategy. Windows Phone has been on the market in one form or another since October 2010. And no one cares.

This is why it's in the state that it is.

Hate to say it but any OEM entering into the smartphone business now regardless if its Android or Windows Phone is going to have a tough time making profits. The fact is, the market is saturated on the Android side with many OEMs and Samsung on the WP side Nokia is dominating. People are also just not buying new phones as often or are waiting for the iPhone 6, the market stats are showing this flat line. The carriers can't market every phone out there, people will buy what they know is selling

wv@gt said,
Hate to say it but any OEM entering into the smartphone business now regardless if its Android or Windows Phone is going to have a tough time making profits.

Except Huawei isn't dropping Android, it's dropping Windows Phone. It's clearly still profitable to be an Android OEM because of the huge market. Windows Phone on the other hand constitutes a tiny market (only 2.5% of smartphones), and any OEM entering it has to compete with the platform vendor (Microsoft). Not an attractive proposition.

wv@gt said,

The fact is, the market is saturated on the Android side with many OEMs and Samsung

I keep hearing this statement from people on this site, yet I see no evidence of that. In actual fact, Android is far less dominated than say Windows phone, where Microsoft, the platform vendor, controls over 90% of the market. Now that's saturated.

wv@gt said,

on the WP side Nokia is dominating.

Nokia doesn't exist in the phone business any more. It's just Microsoft, the same company who makes the OS. Hence why OEM's are hesitant to jump in. How can they possibly compete with the company that produces the OS?

Not to mention that the only WP devices that sell are low/zero margin cheapo 520's and that ilk. Huawei has realised this, and has decided it's too expensive because mid range and high-end WP devices just don't sell.

Simplezz, he does have a point about OEMs entering the market. Just look at Amazon Fire Fly. Considering that you can install apps from Google's store, it still only managed (if accurate) to sell 35K in 20 days.

I think MS need to realize that in the smartphone business, they cannot rely on OEMs. They just need to do it on their own. In addition, while I like the interface, MS need to make changes to it ...make it more like a Surface interface - scroll side to side, allow you to categorize or create a set of tiles base on your categorization, plus the fact that users are more familiar with the side to side scrolling.

HawkMan said,
Wow, you keep making up lower percentage out of thin air every time you comment simplezz...

He is not making anything up, Windows Phone has a 2.5% worldwide marketshare and shrinking while Nokia/Microsoft handsets make up 90% of that already tiny number...leaving what for OEM's? Pretty much nothing

Huawei barely has margins on their Android phones.

They, however have margins on other stuff, that the US won't let them sell there.

LauRoman said,
Huawei barely has margins on their Android phones.

Huawei successfully sells mid-high end Android phones. That's where the money is. Those kinds of WP devices don't sell. Only low-end 520's that Microsoft dumps on the market sell. But as can be seen from Nokia/Microsoft financials, they don't make any money from them.

LauRoman said,

They, however have margins on other stuff, that the US won't let them sell there.

The fact remains that WP is a low/zero-margin smartphone OS. And Microsoft, the platform vendor, controls over 90% of that. What's left for other OEM's really? Scraps at best.

So they made two models, that they hardly even released anywhere, I haven't seen them anywhere and they certainly haven't been advertised, they where pretty bad devices compared to the competition and they're surprised it didn't sell... then again, I'm surprised most of their android models sell.

Makes sense. They are not making much money on Android right now since Samsung is dominating, so to introduce another OS that has not been doing so hot, will just kill the company. Maybe if/when their other phones take off, they will revisit WP. Or if WP happens to start taking off sometime.

Windows Phone needs all the help it can get... so this stings, in my opinion. Did Huawei put their all into Windows Phone? Probably not. But who is besides Microsoft? That's the problem.

I'm still hopeful Microsoft can turn things around for the OS... but I'm no longer optimistic.

cybersaurusrex said,
Windows Phone needs all the help it can get... so this stings, in my opinion. Did Huawei put their all into Windows Phone? Probably not. But who is besides Microsoft? That's the problem.

What incentive do OEM's have to invest in WP? Only the low-end sells, and Microsoft controls most of that.

Article said,
the Chinese government who has accused the company of unfair business practices and spying on the government.

The Chinese government has not accused them of spying. Even the article you link to doesn't refer to it. Stop spreading such obvious crap.

No doubt they'll announce a new smartphone OS in the near future that'll look and work identical to Windows Phone, but "made" by a Chinese company....