Huawei predicts double-digit sales growth

Huawei predicts double-digit sales growth

08 APR 2013

Chinese supplier Huawei reckons it will rack up a 10 per cent compound annual growth rate (CAGR) in sales over the next five years.

“ICT will continue to grow, with new opportunities coming from cloud computing, bring-your-own-device, big data, and feature phones being replaced by smartphones at a faster rate,” said Guo Ping, Huawei’s rotating and acting chief executive.

The executive’s upbeat statement accompanied the publication today of Huawei’s annual report, which reported an 8 per cent rise in sales, to CNY220.2 billion ($35.4 billion), which was in line with previous guidance.

Top-line growth was boosted by a strong performance in its domestic market, combined with growing popularity of its cloud-based technologies and smartphones.

The Chinese supplier also managed to hold its operating margin steady, year-on-year, at 9.1 per cent – although that’s significantly down from a dizzying 16.8 per cent in 2010.

Improved operational efficiencies, said Guo Ping, helped Huawei meet its business performance expectations during 2012.

Unlike in recent years, the majority of Huawei’s growth in 2012 came from its home market and not abroad. Sales in China were up 12.2 per cent, to CNY73.6 billion, while international sales rose 6 per cent – an exact reversal to the previous year.

Of its international sales, America grew the slowest (4.3 per cent) to CNY31.8 billion. Huawei still faces political resistance in the US, making it difficult for the Chinese firm to strike deals with national carriers there.

Sales in EMEA (CNY77.4 billion) and Asia Pacific (CNY37.5 billion) grew by 6.1 per cent and 7.2 per cent respectively.

Revenue abroad accounts for 67 per cent of Huawei’s turnover, down from 68 per cent the year before.

Huawei’s carrier network business segment grew by a modest 6.7 per cent, to CNY160.1 billion. Of that sum, CNY49.9 billion comes from wireless network equipment.

By the end of 2012, Huawei said it had won 139 LTE and 80 EPC contracts, of which 73 LTE and 59 EPC networks had been commercially launched.

The consumer business, which includes Huawei’s smartphones, grew by a steady 8.4 per cent to CNY48.4 billion. Annual mobile-phone shipments totalled 127 million units – including 32 million smartphones – which was a 60 per cent year-on-year increase.

IDC estimates that Huawei was the world’s third-largest smartphone vendor in the fourth quarter last year, shipping 10.8 million units, although that is still some way behind Samsung (63.7 million) and Apple (47.8 million).

Of Huawei’s three business segments, Enterprise posted the strongest growth – at 25.8 per cent – although it’s the firm’s smallest business unit by far, accounting for only around 5 per cent of overall turnover.

Author

Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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