Huawei looks to organic growth, not acquisitions

Smartphone vendor scotches rumours, says it has not held any discussions with BlackBerry

PUBLISHED : Thursday, 07 November, 2013, 3:09am
UPDATED : Thursday, 07 November, 2013, 3:09am

Huawei Technologies, the third- largest smartphone vendor, is focusing on a gradual growth strategy instead of acquisitions to chase Samsung Electronics and Apple for market share, its deputy chairman said.

"We're not expecting an explosive development of our smartphone business, rather we want to grow that business step by step," Eric Xu told reporters in London. "Ultimately we want to be the leading brand worldwide in smartphones, but it will take a while to get there."

Xu confirmed Huawei's smartphone growth target of 10 per cent this year and next. The company is relying more on handsets while it fights cybersecurity concerns that have restricted its access in US and Australian phone equipment markets.

Huawei, China's largest supplier of telecommunications networks, isn't planning an acquisition to bolster its position because of potential product overlaps, he said.

Ultimately we want to be the leading brand worldwide in smartphones, but it will take a while to get there

The comments would damp speculation over a link-up by the Chinese company with takeover targets such as France's Alcatel- Lucent and BlackBerry of Canada. Huawei hasn't held any discussions with BlackBerry, said Xu, who is also acting chief executive officer under a rotating arrangement set up two years ago by the closely held company based in Shenzhen.

European carriers are accelerating their expansion of fourth-generation networks, and Huawei will focus on upgrading existing customers in the region to faster services, Xu said.

As telecommunications operators move towards consolidation in the region, Xu said Huawei has found operators prefer having choices in their vendors, comparing it to the fashion industry in that "customers' needs are changing constantly".

Huawei shipped 12.5 million smartphones in the third quarter, taking 4.8 per cent of the global market, trailing only Samsung's 31 per cent and Apple's 13 per cent, researcher International Data Corp said last month.

Huawei is closely trailed by Lenovo Group, which held 4.7 per cent of the global smartphone market in the quarter with 12.3 million units shipped, and LG Electronics at 4.6 per cent with 12 million unit shipments, according to IDC.

"We don't know if we can keep that spot next quarter and we don't care much about being No3 at any given quarter," Xu said. "We want to be an athlete in the long run and grow step by step."

Smartphones helped boost Huawei's sales 11 per cent in the first six months this year to 113.8 billion yuan (HK$143.7 billion). Its 10 per cent annual smartphone growth could raise consumer devices to 25 per cent of the company's sales in 2017 from 22 per cent last year, deputy chairman Guo Ping said in April.

Sales of network equipment will fall to 60 per cent of revenue in 2017 from 73 per cent last year, Guo said.