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Why Huawei’s Chinese Dominance May Not Translate into American Success

IFA 2015 Consumer Electronics And Appliances Trade FairIFA 2015 Consumer Electronics And Appliances Trade Fair
Visitors try out the Huawei Mate S smartphone at the Huawei stand at the 2015 IFA consumer electronics and appliances trade fair on Sept. 4, 2015 in Berlin, Germany. Sean Gallup/ Getty Images

Chinese technology giant Huawei may face difficulties breaking its latest smartphone into the American market.

According to The Wall Street Journal, the company announced that it would launch its high-end Mate 9 smartphone in the United States earlier this month, but has yet to specify a launch date or price range.

The company—which is known in the U.S. for supplying relatively inexpensive smartphones—is said to be trying to enter the market for phones above the $500 range, a market which is dominated by products from Apple (AAPL) and Samsung (SSNLF).

However, despite Huawei’s leading position in its home country, the firm is facing several hurdles, including low brand recognition in the U.S. and persistent concerns over China using the company’s products to try to spy on Americans.

Such allegations have inhibited the tech giant from truly breaking through the U.S. market in recent years, and in 2013, the company’s founder Ren Zhengfei, a former engineer of the People’s Liberation Army, announced that he would no longer look for business in the American market, according to Foreign Policy.

Yet, the smartphone maker has still maintained a small presence in the United States, selling products in lower price ranges primarily out of retail chains such as Best Buy, according to the Journal.

Huawei isn’t the only company to face accusations of spying for China; earlier this month, Florida-based BLU Phone was accused of leaking data to the Chinese government due to a backdoor created by Chinese software company, Shanghai Adups Technology.

Huawei is the world’s third-biggest smartphone manufacturer and most profitable Android smartphone manufacturer, and it has had considerable success in markets outside the United States, including Europe, where the company more than doubled its market share to 13% since last year.

Yet, Huawei’s success abroad hasn’t translated in the U.S. market, seen as the world’s largest market for high-end phones. According to WSJ‘s figures, Apple dominates the U.S. smartphone market with 39% of the market share. Samsung, with 23%, comes in second, and Huawei, with less than .5%, doesn’t even make the top five.

Globally, the picture is very different; Samsung dominates the global market with a market share of 22%, Apple ranks in second with 13%, and Huawei trails close behind, with about 9.4%.

Huawei’s consumer business group CEO Richard Yu said earlier in November that the company hopes to be the second biggest maker of smartphones in two years.

According to the Journal, Huawei will also need to rethink its retail strategy for the U.S. market, where phones are mainly bought on plans with a cellular provider rather than retail stores. It is unclear which cellular provider, if any, Huawei will get to work with in the United States.

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The company is still hopeful about making it in the U.S. market. “The U.S. device market is significant for Huawei,” a company spokesman told the Journal. “We are patient, however, and we measure our success over the long term.”