Huawei forecasts slowing revenue growth

02 JAN 2018

Huawei rotating CEO Ken Hu (pictured) said in a New Year’s message the company expects 2017 revenue to have increased 15 per cent to CNY600 billion ($91.2 billion), representing the company’s slowest growth since 2013.

Carrier and enterprise divisions
The CEO claimed that, despite fluctuations in telco investment cycles, its carrier business “remained healthy and robust” in 2017. And its enterprise business – boosted by hype around digital transformation – won deals with 197 companies in the Fortune Global 500 (45 of which are in the Fortune 100): “Our enterprise business is brimming with potential, and will soon burst forth with tremendous vitality,” proclaimed Hu.

Consumer division
Mobile phone shipments increased 10 per cent year-on-year in 2017 to 153 million units he said, giving it more than 10 per cent global market share. The consumer group’s revenue in 2017 is expected to increase about 30 per cent year-on-year to CNY236 billion (also its slowest growth since 2013).

“We are firmly situated among the top three phone makers in the world and remain the market leader in China,” Hu said.

Huawei in October officially announced its Mate 10 series devices, which use the company’s latest artificial intelligence (AI)-optimised processor, claimed to be faster than Apple’s iPhones.

Richard Yu, CEO of Huawei’s consumer business group, said in a separate New Year’s message: “In 2018, we will continue to release disruptive products and innovative technology to lead the global market. I believe that 2018 will be the first year we set foot on the path to true global prominence.”

Yu said the Mate 10 has remained a bestseller and “we can barely keep up with demand”.

In the new year, he said it will continue to reinforce the implementation of its dual Huawei and (mid-tier) Honor brand strategy. “Honor will strive to deliver stylish new gadgets that young people love…the Huawei brand will strive to obtain a larger share in the high-end market, serve a wider audience”.

Cloud business
Reflecting on the launch in 2017 of its Cloud Business Unit, Huawei’s Ken Hu stated that Huawei now offers 97 different cloud services across 14 major categories: “Since the formation of the Cloud BU, resource utilisation and our number of cloud users have both tripled. In 2017, after announcing plans to collaborate more broadly on a range of public cloud offerings, we have forged over 1,000 strategic partnerships around the world.”

Objectives
With the vendor set to turn 30 years old this year, Hu outlined objectives for its four major business areas: “Our Carrier BG needs to keep ahead of industry growth, improve contract quality, and actively seek out new growth opportunities. Our Enterprise BG needs to keep growing at a faster pace and become one of our core business pillars within five years’ time. Our Consumer BG needs to reinforce its foundations, maintain positive growth momentum, and keep on improving profitability. Our public cloud business needs to invest according to plan, improve the competitiveness of its products, and concentrate on scaling out.”

Meanwhile to adapt to a more complex business structure, Hu said Huawei will “gradually establish a decentralised operations model.”

“Responsibilities and authority will be clearly defined, operations will be more efficient, and oversight more effective,” he noted. “This will allow our business units to grow in the manner they see fit, while operating under the auspices of a shared platform and a shared system of values.”

Targeting huge growth
Looking ahead, it’s clear Huawei aims to continue to dominate the network vendor market while boosting its consumer brand recognition.

“As a global player, we need to be patient and persistent, demonstrating our value and contribution one quiet step at a time. We need to earn trust, continue to improve, and cultivate a receptive business environment that can support business development on a whole new level: not just 100 billion dollars, but revenues of hundreds of billions of dollars and beyond,” said Hu.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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