Huawei Boss Tells Handset Team to Sober Up
Huawei's ambitious devices team finished 2013 on a high, boosting sales nearly 18% and bustling into third place in the global smartphone rankings. (See Asia Strengthens Its Grip on Smartphone Market.)
But Huawei Technologies Co. Ltd. founder and CEO Ren Zhengfei let the air out of their tires when he paid a rare visit to the device division's offices last month to accuse them of complacency.
In a recent speech widely reported in the Chinese media, the reclusive chief warned the group not to turn into a "bubble" after scoring some business success.
He pointed out that Apple Inc. (Nasdaq: AAPL) returned a full-year profit of $50 billion and Samsung Corp. $40 billion. "If you can give me $30 billion then I will recognize you as no. 3," he said bluntly. "Now you are earning several hundred million dollars and starting to get hot… that's complacency."
He appealed to the group to "not let the Internet give them a fever" from the publicity around their success. "Don't just blindly follow Apple or Samsung or Xiaomi [Chinese device vendor]. Don't take the easy road."
Acting CEO Eric Xu confirmed the reports at the company's annual global analysts' briefing in Shenzhen Wednesday.
"We have concerns that the consumer business group may not be as down to earth as they used to be, simply because of the success they achieved last year. Therefore we cooled them down in advance so that they can become sober, and so they can fully understand where they are."
Shao Yang, director of marketing for the consumer group, said Ren was saying "don't just get big, get strong."
Notwithstanding the rebuke, Huawei's consumer business unit has made some impressive progress in the three years since its creation. It now accounts for nearly a quarter of Huawei's total revenue, and already this year it has shipped 4 million units of its flagship Ascend P6 device. Awareness of the Huawei brand rose last year from 32% to 68% in China and 9% to 22% in the US. (See Huawei Pumps Up Its Profits to $3.5B and Huawei's Handsets Man Has Been Here Before.)
Xu said the company did not believe there were problems with its devices and that there would be no major changes to that group's strategy going forward.
— Robert Clark, contributing editor, special to Light Reading