Huawei revenue gets 'smart' boost

Huawei products at an information industry expo in Nanjing, Jiangsu province. The company beat expectations in handsets shipments in the first half of the year amid intense competition with market leader Xiaomi Corp for the top slot in China. [Photo/China Daily]

Company nets $28b in first six months after strong growth in key segments

Huawei Technologies Co Ltd on Monday said its revenue during the first six months of the year rose 30 percent to 175.9 billion yuan ($28 billion), fueled by strong growth in its smartphone, enterprise and telecom equipment businesses.

The biggest communications equipment maker in China said its operating margin during the January-June period was 18 percent, compared with 18.3 percent during the same period a year ago. Privately held Huawei did not disclose the earnings for individual sectors.

Meng Wanzhou, chief financial officer of Huawei, said the company's smartphone sales made "solid progress" during the period under review.

"Huawei's mid-range and high-end smartphones, Mate7 and P8 in particular, helped us guarantee quality and sustainable growth in the consumer business," Meng said.

The Shenzhen, Guangdong-based company shipped nearly 50 million smartphones in the January-June period, according to Yu Chengdong, head of the consumer unit. Shipments during the first half of 2014 were 34 million, the company said. Huawei beat market expectations in handsets shipments amid intense competition with current market leader Xiaomi Corp for the top slot in China.

With Samsung Electronics Co losing its edge in the market and Apple Inc releasing just one or two high-end devices every year, being the top vendor means huge market share and phenomenal earnings in the high-end market.

Huawei controlled 5.4 percent of the domestic smartphone market as of the first quarter, lagging behind Samsung, Apple Inc and Lenovo Group Ltd, according to research firm Gartner Inc.

Huang Leping, a Shanghai-based analyst at Nomura Securities Co, said Huawei has witnessed impressive growth in its smartphone business this year. "It will release a number of new handsets later this year and they will boost shipments further," Huang said.

Huawei is planning to launch Ascend Mate 8, a next-generation phone in the 4,000-5,000 yuan price range in the coming months. The company will also produce a Nexus device for Google Inc later this year.

The Nexus series is a product family that is marketed by Google, the developer of the Android operating system.

Huawei is the only Chinese vendor that makes the Nexus products. Motorola Mobility had built Nexus devices prior to its acquisition by Lenovo last year.

Anshul Gupta, Gartner's research director who oversees global consumer electronics, said the growth of local firms will give companies such as Huawei and Xiaomi a bigger opportunity.

In the carrier business, the most profitable sector for Huawei, the company maintained "steady growth", because China is building its fourth-generation networks and global data traffic growth is boosting investment in network capacity expansion, Meng said.

Chinese telecom carriers are building the world's largest 4G networks across the country, giving local players such as Huawei, ZTE Corp and Datang Telecom Technology and Industry Group most of the orders to build base stations and other facilities.

Huawei has also started seeing accelerated growth in its enterprise business, boosted by increasing demand for cloud computing, storage and other products related to smart city, finance and education markets.