Huawei set for slight dip in revenue growth; aims to shake up culture - Mobile World Live

Huawei set for slight dip in revenue growth; aims to shake up culture

30 DEC 2016

China’s Huawei expects to report a slight slowdown in revenue growth for 2016, down from 37 per cent in 2015 to 32 per cent for the past twelve months.

The mobile device and network giant sees 2016 revenue hitting CNY520 billion ($74.8 billion). This would be just shy of a $75 billion target announced earlier this year.

Despite the small dip in growth, its performance in 2016 marks Huawei as a major success story in the mobile space; the company is the world’s third largest smartphone vendor (with a market share of around 9 per cent) and is arguably a bigger player now than long-term (and currently troubled) network rival Ericsson.

In 2015 Huawei reported revenue of CNY395 billion ($57 billion).

Eric XuRotating CEO Eric Xu (pictured) revealed the 2016 forecast in a message to employees.

Xu also noted that the company expects to face greater global political and economic uncertainties in 2017.

“The year 2016 has seen a flock of black swans – both political and economic – sweep across the globe. Nevertheless, we have remained focused on our strategy and have patiently applied ourselves to making breakthroughs and creating real value for our customers,” Xu said.

Cultural rethink
And Xu said the company must examine its culture and rethink the way it conducts business, in order to stay at the top of its game.

Xu highlighted a list of activities to cut from its culture, including “empty talks in offices that are far removed from actual business” and “fancy” internal promotional videos and slides used to demonstrate “value” to managers. He wants more independent thinking and visits to key operations from base stations to stores. Xu’s message clearly honed in on the need to avoid unnecessary internal spend.

More fundamentally, Xu urged a shift in attitude and mindset from merely responding to customers to actively evolving into a technology leader. In the memo, he outlined an objective to build research and innovation centers globally.

Smartphone success
In the smartphone space this year, Huawei has established itself as a serious contender to Apple and Samsung. Last month Gartner noted that Huawei closed the gap with number two Apple in the third quarter of 2016, with there being less than a three percentage point difference in market share between them.

In fact, just this week Huawei announced it has shipped more than 10 million Huawei P9/P9 Plus smartphones globally, making it the company’s first flagship series to top the 10 million mark.

Huawei’s consumer business, which includes mainly smartphones, probably grew sales 42 per cent to CNY178 billion in 2016, divisional CEO Richard Yu said in a separate memo. Yu expects smartphone shipments this year to have grown by approximately 29 per cent to 139 million units, up from 100 million in 2015.

Networks
Meanwhile the company is now seen as the world’s number one mobile infrastructure supplier, taking market share from western players Ericson and Nokia. This is despite having very little presence in the US due to government security concerns (a situation that is unlikely to change with the new Trump administration).

And it’s also a serious contender in the enterprise space, although Mobile World Live reported in September that its enterprise group’s target to expand revenue to $10 billion by next year will be pushed back one year to 2018. Last year sales at the division grew 44 per cent to CNY27.6 billion ($4.3 billon).

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Justin Springham

Justin manages the editorial content for the Mobile World Live portal and award-winning Mobile World Live TV service. In the last few years Justin has launched and grown a portfolio of premier media products, which include the Mobile World Congress...

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