China’s Huawei targets US$20 billion for consumer business as its smartphone sales surge

PUBLISHED : Wednesday, 22 July, 2015, 3:39pm
UPDATED : Friday, 04 September, 2015, 1:09pm

Huawei Technologies' consumer business group has raised its target revenue this year to US$20 billion, up from the previous forecast of US$16 billion, after its phone sales jumped significantly in the first half.

Shenzhen-based Huawei, mainland China's largest telecommunications equipment manufacturer, saw its sharpened focus on mid-priced to high-end smartphones pay off as total revenue in the period climbed 69 per cent to US$9.09 billion, up from US$5.38 billion a year ago.

The company is now working on a "secret product" to rival Apple's iPhone 6 in terms of design, hardware and innovation, Richard Yu Chengdong, CEO of Huawei Consumer Business Group, said on Wednesday in Shenzhen.

He added that Huawei aims to beat Apple in both sales and performance in China by 2018, but that it has not set a date for when it will launch a smartphone in the US.

Reporting on its third financial quarter, Apple said on Tuesday its China sales had more than doubled year on year to $13.23 billion.

For the Chinese tech giant, total handset sales in the first half surged 87 per cent to US$7.23 billion, up from US$3.87 billion in the same period last year, on the back of a higher average selling price and rising shipments overseas.

"This incredible growth is a testament to our core business strategy to offer premium quality products," Richard Yu Chengdong, the chief executive at Huawei's consumer business group, said on Wednesday.

This business group also supplies media tablets, smart wearable devices, portable Wi-fi routers, home broadband modems, video set-top boxes, Bluetooth speakers and mobile applications.

In the first half, the group's total sales represented 32 per cent of privately-held Huawei's overall revenue of about US$28 billion. That was a greater share than its 24 per cent contribution a year earlier.

Huawei's combined 3G and 4G smartphone shipments grew 39 per cent year on year to 48.2 million units in the first half. About 31 per cent were mid-priced to high-end smartphones.

About five million units of the company's flagship smartphone, the Mate7, were shipped in 100 countries in the first half.

Research firm GfK said Huawei was the world's third-biggest smartphone supplier, with an 8.8 per cent market share at the end of April. It was behind No. 1 Samsung Electronics, which had a 26.7 per cent share, and Apple with 13 per cent.

From the March to May period, GfK estimated that Huawei cornered a 15.2 per cent share in mainland China. That was enough to move the company ahead of Apple, with 11.5 per cent, and Samsung's 8.8 per cent share.

Huawei had earlier announced plans to ship 100 million smartphones this year, which would top the 75 million it sold last year.

"With our consistent and huge investment in research and development, Huawei is set to become one of the key players in the long run," Yu said.

Huawei has 16 research and development facilities around the world. These include an aesthetic research centre in France, a mathematics research centre in Russia, a design and quality control research centre in Japan and a software research centre in India. 

Watch: Chinese smartphone makers have Apple in their sights

Earlier this month, the company received security clearance to manufacture in India, where it said it has ambitions to become a top three brand within three years.

As of June 30, Huawei has applied for a total of 76,687 patents, of which 18,000 are device-related. 

At the GSMA Mobile World Congress in Shanghai last week, Huawei's consumer business group and Shanghai General Motors unveiled a partnership to promote the development of so-called interconnected cars.

"Vehicles are becoming the next mobile smart device after smartphones," Yu said. 

That followed Huawei's alliance with other major car brands in the first half,, including Volkswagen, Mercedes-Benz and Audi.