Huawei bets on tech­nol­ogy

Com­pany to face tough times amid tele­com slow­down

China Daily European Weekly - - BUSINESS - By MA SI masi@chi­

Huawei Tech­nolo­gies Co Ltd aims to post $102.2 bil­lion in rev­enue this year, up by about 9 per­cent year-on-year, as the Chinese tech gi­ant steps up its push to grow its smart­phone and en­ter­prise busi­ness amid a slow­down in the tele­com equip­ment in­dus­try.

The tar­get, an­nounced on Jan 18, will be the first time that the Shen­zhen-based com­pany is look­ing to top the $100 bil­lion (80.3 bil­lion eu­ros; £70 bil­lion) mark. Still, it re­mains a rel­a­tively slower growth rate com­pared with its per­for­mance in 2017.

Last year, its rev­enue grew by about 15 per­cent to around 600 bil­lion yuan ($93.7 bil­lion; 76 bil­lion eu­ros; £66 bil­lion).

Specif­i­cally, Huawei’s con­sumer busi­ness group, which in­cludes smart­phones, aims to post $44 bil­lion in rev­enue in 2018, rep­re­sent­ing about 20 per­cent year-on-year growth.

Huawei is al­ready the world’s third-largest smart­phone ven­dor, just be­hind Sam­sung Elec­tron­ics Co Ltd and Ap­ple Inc. Last year, its con­sumer busi­ness group recorded 236 bil­lion yuan in rev­enue, up about 30 per­cent com­pared with its per­for­mance in 2016.

Founded in 1987, Huawei started as a tele­com equip­ment maker. Its phe­nom­e­nal suc­cess en­abled the com­pany to ex­pand into ar­eas such as smart­phones, cloud com­put­ing and smart city projects.

Xiang Li­gang, CEO of tele­coms in­dus­try web­site Cc­time, says, “As global tele­com car­ri­ers fin­ish build­ing 4G base sta­tions and the plan on 5G tele­com in­fra­struc­ture is yet to be­gin, tele­com equip­ment mak­ers in­clud­ing Huawei are all fac­ing in­tense pres­sure.

“Huawei is in­deed grow­ing more slowly, but as long as it main­tains rel­a­tively steady mo­men­tum, and its smart­phone busi­nesses make progress in overseas coun­tries, it can sur­vive the down­ward in­dus­try cy­cle,” Xiang says.

Last year, Huawei once again se­cured its po­si­tion as the top player in China, the world’s largest mobile phone mar­ket. It sold 102 mil­lion smart­phones, with a mar­ket share of about 23 per­cent, data from re­search com­pany GFK show.

The ro­bust growth in 2017 gives Huawei a bigger ad­van­tage than it had in 2016, with its sales out­per­form­ing immediate fol­low­ers Oppo and Vivo by about 20 mil­lion hand­sets.

But the com­pany re­cently suf­fered a blow in the United States, a mar­ket it must con­quer if it wants to beat Ap­ple and Sam­sung. Ear­lier this month, AT&T, the No 2 US wire­less car­rier, dropped a deal to sell the com­pany’s smart­phones at the last minute. The can­cel­la­tion means Huawei is un­able to ac­cess the ma­jor­ity of lo­cal con­sumers as car­rier re­tail chan­nels ac­count for about 90 per­cent of smart­phone sales in the US.


A rep­re­sen­ta­tive pre­pares a Huawei Mate 10 Pro smart­phone for dis­play at the com­pany’s booth dur­ing CES 2018 at the Las Ve­gas Con­ven­tion Cen­ter in Ne­vada.

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