Huawei lifts handset outlook, wins $1B in 5G orders

It's been a good news week for Huawei, with the vendor hiking its handset forecast and winning big in a major China network tender. The company has lifted its 2023 shipment target from 30 million to 40 million units – the latest sign of a revival of its device business.

A supply chain source told the Securities Times the company had set the 30 million target at the beginning of the year, but with sales steadily increasing it recently raised the target to 40 million units.

People close to the company said smartphone sales were improving and described demand for flagship models like P60 and MateX3 and other mobile phones as "fairly satisfactory." Huawei's improving device sales – despite the US sanctions which block it from making 5G phones – defy the worldwide industry downturn.

It shipped 6.5 million units in Q1, a 14.3% rise over Q1 a year ago, Omdia figures show. By contrast the global market declined 12.7% in Q1, with Samsung sales contracting 18% and Xiaomi's 22%.

Omdia noted Huawei's quarterly sales had dipped sequentially in the last two quarters but, thanks to a year of growth from Q4 2021 to Q3 2022, the company "is still in a better position now versus a year ago."

Huawei ranks tenth on Omdia's list of global handset vendors with just 2% of the market. Honor, the mid and low-end smartphone brand it sold off two years ago, has a 4% share.

$1.1B in 5G contracts

The raised outlook sparked a mini-rally in the stocks of key Huawei suppliers, led by cloud security firm Yusys Technologies, up 16.5% in the past five days.

Meanwhile in its core carrier equipment business, Huawei continues to dominate the Chinese market. It has just won 7.9 billion Chinese yuan (US$1.1 billion) in orders from China Mobile in China's largest telecom tender so far this year.

Huawei was the dominant supplier in both parts of the tender, which was divided into 2.6GHz and 4.9GHz on one side and 700MHz gear on the other. Huawei was awarded contracts to supply just over half of the 64,000-basestation deployment, worth CNY3.76 billion ($530 million).

For China Mobile's joint rollout with China Broadnet in the 700MHz band, Huawei won contracts for half of the 23,140 basestations with a total value of around CNY1.74 billion ($243 million), local website C114 calculated.

ZTE won the second largest volume of orders, worth CNY2.1 billion ($294 million), followed by Ericsson with CNY630 million ($88 million), Datang Mobile with CNY550 million ($77 million) and Nokia Bell with CNY400 million ($56 million).

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— Robert Clark, Contributing Editor, special to Light Reading