At CES, Chinese Electronics Giants Compete for American Eyes




LAS VEGAS — You’ve heard the complaints. The Consumer Electronics Show in Las Vegas is too unwieldy and too outdated for tech titans such as Apple, Amazon, Google and Microsoft to even show up in Las Vegas.

But for a group of Chinese hardware makers trying desperately to make a name for themselves with U.S. retailers and consumers, CES is crucial. For Hisense, Huawei, Haier, TCL, ZTE and other Chinese firms you’ve likely never heard of, CES is an opportunity to reach the masses, as they hope to go from anonymous tech providers to brands in their own right.

“The U.S. is the most important market in our portfolio,” Lin Lan, the vice president of Hisense, told Wired on Monday. “We’ve said this: If we are successful only in China and other countries without success here, we are not a big brand.”

Hisense isn’t close to a big brand in the U.S. In 2012, it racked up $600 million in U.S. sales, but most of that came from TVs it built for retailer house brands — namely Dynex and Insignia, which are sold at Best Buy. But now it wants you to know it under its own name.

For decades, Microsoft had one of the largest booths at CES, dominating a corner of the Central Hall at the Las Vegas Convention Center. When Microsoft decided to skip this year’s show, Hisense moved into the Windows-maker’s old space. The 9,600-square-foot booth is packed with 32 different TVs, ranging in size from 32 to 110 inches, and with as few or as many features as you could possibly want. Google TV, built-in streaming services such as Netflix, 3-D, OLED, 4K ultra-high definition, thick bezels or thin, black, white, chrome or brushed aluminum — Hisense has an answer to everything Sony, Samsung, Sharp, LG, Panasonic, Vizio and other established U.S. TV brands are pumping out.


Lin Lan, Vice President of Hisense. Photo: Ariel Zambelich/Wired

And then there are the appliances: refrigerators, washers and dryers, ovens, air conditioning units, Blu-ray players and even a streaming Google TV set-top box. Few companies at CES are displaying as wide an array of gear as this electronics giant owned by the Chinese government. Still, Hisense products are tough to find in the U.S. outside of Walmart, Amazon.com and Costco.com.

Huawei, the second-largest maker of telecommunications infrastructure technology in the world, is another massive firm that’s largely unknown in the U.S., outside of espionage worries. While Samsung, Sony and even Qualcomm had packed houses for their press conferences, Hisense and Huawei had seats to spare.

Richard Yu, the CEO of Huawei’s consumer devices business, told reporters (some of whom had fallen asleep) at his company’s press conference that the U.S. is a key market for his firm’s future. Where Hisense seems to want to make every gadget and appliance, Huawei is focused on smartphones and tablets. But so far, it’s been unable to get most U.S. carriers to sell its branded products.

“Your network was probably built by Huawei,” Yu said. “You’re using our technology already and you don’t even know it.”

And therein lies the problem. Hisense and Huawei, like many Chinese companies, can build hardware just as good as their rivals, because in the past, they actually have built the hardware for their rivals. But while producing products without your brand name creates profits, it doesn’t bring you top of mind with consumers, said Jeff Lotman, the CEO of Global Icons, an agency that helps companies build and license their brands.

“The thing that’s amazing is these are huge companies, and they have a lot of power, but in the United States nobody has heard of them and they’re having trouble gaining traction,” Lotman said. “But it’s not impossible. Samsung was once known for making crappy, low-end phones and cheap TVs. Now they’re seen as a top TV and smartphone brand.”

Lenovo, a Chinese company that pulled off (in the PC market) what Hisense and Huawei are trying to achieve with TVs, smartphones and tablets, manufactured IBM’s ThinkPad laptops for years before eventually buying the ThinkPad brand.

If any of these companies are to succeed, they’ll need to have consistently impressive showings at CES for years to come, said Paul Gagnon, a mobile analyst with the Display Search research firm.

“If Hisense or any of these other Chinese companies held their own U.S. events to launch products, the press wouldn’t even show up,” Gagnon said. “Samsung, Apple, Google, they create more hype by hosting their own events. But these companies need the hype of CES to elevate what they’re doing.”

Peter Erdman, Hisense’s head of North American sales, agreed. “CES is hugely important for us,” Erdman told Wired. “This is our coming out party. We’ve been developing the business for many, many years, but this year in particular, our scale has hit a point where a lot more people are aware of us and so we really have to show them now what we’re about.”


Peter Erdman, Head of North American Sales for Hisense. Photo: Ariel Zambelich/Wired

Over the next year, Erdman says Hisense TVs should start showing up in more U.S. retailers, from smaller regional stores to nationwide outlets, adding that he’s in talks with Target and Sam’s Club too. If you do come across a Hisense TV, it should be priced about 10 to 20 percent below top rivals, such as Samsung and LG, Erdman said.

Still, the $600 million worth of TVs and other electronics Hisense sold last year in the U.S. pales to it’s business in other nations. In China, Hisense has been the number one TV maker for the last nine years. In 2012, Hisense sold $11 billion worth of products in China and another $2 billion overseas.

As for Huawei, it introduced two Android smartphones at CES — the world’s largest smartphone, the 6.1-inch Ascend Mate, and the 5-inch Ascend D2, which Yu said was faster and more powerful than any other Android phone available. Last year at CES, Huawei showed of the thinnest Android smartphone in the world, the Ascend P1. To date, none of the major U.S. carriers — AT&T, Sprint, T-Mobile and Verizon — sell its flagship Ascend phones or branded tablets. T-Mobile has sold Huawei phones in the past under its MyTouch brand, as well as a 7-inch tablet it marketed as the T-Mobile Spring Board. Yu said Huawei was in talks with U.S. carriers to finally bring its products to the States.

Lan, from Hisense, says he’s seen the good and bad decisions that other Chinese companies have made, and he’s confident that his company won’t run into the same troubles Huawei and others have so far faced.

“The U.S. is a country where people like new stuff, they like entrepreneurs,” he said. “We say, Samsung is kind of on the top of the food chain, right? They have a lot of fancy stuff here and there. But their stuff, in terms of quality and picture, I don’t see the difference between them and us.”

The difference between Hisense, Huawei and the Samsung and Apple’s of the world isn’t in the technology, the components, or hardware specs, but in the brand name and the marketing skill, said Peter Han, an analyst at the Current Analysis research firm.

“It’s really hard for existing, established manufactures like Motorola, HTC, LG to compete with Samsung and Apple, much less Huawei or others new to the U.S,” Han said. “The problem is they have zero brand recognition here. That’ll change over time, especially if they invest in marketing, but it’s hard for even Sony to sell a phone in the U.S. and everybody knows who Sony is.”




Hisense Boot

http://www.wired.com/gadgetlab/2013/...e-electronics/