Huawei eyes banner year after sales surge 30 per cent in first half to US$28.7 billion

PUBLISHED : Monday, 20 July, 2015, 6:01pm
UPDATED : Monday, 20 July, 2015, 6:01pm

Huawei Technologies, mainland China's biggest telecommunications equipment manufacturer, expects to see robust gains in its consumer, network and enterprise and businesses this year, after posting its strongest first-half revenue growth in five years.

Shenzhen-based Huawei on Monday reported that its total sales in the first six months of the year jumped 30 per cent to 175.9 billion yuan (US$28.7 billion), up from 135.8 billion yuan in the same period last year.

A spokesman confirmed that it was the best first-half sales increase for privately-held Huawei since it started reporting revenue for that period in 2011.

The company, which has operations in 170 countries, last reported nearly similar growth in 2008, when its 12-month revenue surged 33 per cent year on year.

Huawei chief financial officer Cathy Meng Wanzhou attributed the lofty first-half sales to the continued 4G mobile network build-out in mainland China and other markets around the world, the company's expansion into the mid- and high-range smartphone segments, and its sharpened focus on the enterprise business.

Unfazed by the slowdown in China and prevailing uncertainty in the global economy, Meng said: "We are confident that we will maintain effective growth, and steady and healthy development in all business segments in 2015."

Meng, the daughter of Huawei founder and chief executive Ren Zhengfei, pointed out that the the company's flagship premium smartphone, the P8, as well as its mid-range Mate 7 and Honor models have been all well-received, which helps guarantee "sustainable growth in the consumer business".

Having more competitive devices in its portfolio augurs well for Huawei as global smartphone upgrades are tipped to exceed one billion units for the first time this year, driven by sales in China, India and other large markets.

In a recent report, global professional services giant Deloitte estimated that more than one billion of the 1.4 billion smartphones forecast to be sold this year would be bought as upgrades, generating total industry sales of about US$300 billion.

Data from technology market research firm IDC showed that Huawei was the world's fourth-biggest supplier of smartphones in the first quarter, with a 5 per cent share, ahead of LG Electronics. But Huawei was ranked behind Samsung Electronics, Apple and Lenovo Group.

In the carrier network business, Huawei is expected to fall behind that of Nokia and Alcatel Lucent this year, after the Finnish company completes its US$16.6 billion acquisition of its French rival.

That consolidation would make Huawei the world's third-largest supplier of telecommunications equipment, behind perennial industry leader Ericsson and the merged Nokia-Alcatel-Lucent operation.

Meng, however, said Huawei has boosted its spending on next-generation technologies to support growing demand by telecommunications carriers for so-called cloud-computing infrastructure and software-defined network architecture.

"Investment continued to pour into 4G network construction in China," Meng said.

"In addition, the growth in global data traffic drives investment in network capacity expansion, while carriers' digital transformation pushes up investment in information and communications technologies."

In a speech last week at the GSMA Mobile World Congress in Shanghai, Huawei deputy chairman and rotating chief executive Ken Hu said the company was working to "establish formal platforms for cross-industry collaboration to explore future needs, application scenarios and technical standards for 5G".

Huawei, which started research in 5G in 2009, expects its total spending on this mobile technology will amount to US$600 million by 2018.

Meng said the company's efforts in the enterprise business segment has paid off in the first half with products focused on finance, education and so-called smart city projects.