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Android & the Promise of LTE Boost Huawei

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor

Huawei Technologies Co. Ltd. grew in the first half of 2011, thanks in part to the popularity of its new and inexpensive Android phones and the promise of Long Term Evolution (LTE) for operators across the world.

The massive Chinese vendor announced this week that its revenue was up 11 percent year-over-year to 98.3 billion Chinese Yuan (US$15.4B) on operating profits of 12.4 billion CNY (US$1.9B). CFO Cathy Meng said the vendor is confident it will hit its sales target for the year of 199 billion CNY (US$31.1B). (See Huawei Reports H1 2011.) The company's device unit is expected to be one of the major drivers for growth for the rest of the year. One way Huawei is increasing its phone business is by developing less expensive IDEOS smartphones for poorer parts of the world. (See Huawei, ZTE: Global Devices With Nice Prices.) For instance, the MIT Technology Review reported in June that the vendor had sold more than 350,000 of its $80 Android phones in Kenya. This is remarkable because -- as the Singularity Hub blog notes -- 40 percent of the population in that East African country live on two dollars a day or less.

Huawei isn't merely targeting emerging markets. The vendor is also bringing its Blaze and Vision Android phones to the U.K. in September. Bloomberg reports that the company's British operation is aiming for 5 percent market share within twelve months. (See MWC 2011: Huawei Is Not Low Cost!)

Overall, Huawei has increased its 2011 smartphone sales target to 20 million. The vendor shipped around 3 million units in 2010. (See Huawei Ups Smartphone Target.)

An LTE future
On the mobile infrastructure side, LTE and other 4G flavors are becoming increasingly important to Huawei. It has been aggressively pushing its SingleRAN strategy -- base station infrastructure that supports voice, 3G, LTE and more -- to operators around the world. (See Huawei's SingleRAN Offers GSM, UMTS & LTE.)

In the first six months of the year, Huawei says it deployed over 130 SingleRAN commercial networks around the world, all of which support LTE. More than 40 of those operators that have deployed the SingleRAN technology will have launched or will soon launch LTE networks.

— Dan Jones, Site Editor, Light Reading Mobile

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User Rank: Light Beer
12/5/2012 | 4:55:51 PM
re: Android & the Promise of LTE Boost Huawei

Cheap - yes but who said they got no margins?

No margins is when Western companies start selling at cheap prices to compete with Chinese products. When Chinese companies sell their products they do it with profit (and they don't see their prices as 'low' either).


User Rank: Light Sabre
12/5/2012 | 4:55:51 PM
re: Android & the Promise of LTE Boost Huawei
$1.9B profit on $15.4B sales? How is this accomplished with cheap Chinese products selling at no margin?
User Rank: Light Beer
12/5/2012 | 4:55:50 PM
re: Android & the Promise of LTE Boost Huawei

Profits = (Revenue - COGS) [aka GM] - Opex.

If you pay lower wages and thus have lower Opex for the same GM then you end up with profits.



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