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Huawei Profits Climb 30% in 2010Huawei Profits Climb 30% in 2010

Huawei's annual report shows growth in revenue and profit for 2010 and the vendor reveals its board members for the first time

Michelle Donegan

April 18, 2011

3 Min Read
Huawei Profits Climb 30% in 2010

Huawei Technologies Co. Ltd. generated net income of 23.8 billion yuan renminbi (US$3.6 billion) from revenues of RMB 185 billion ($28.3 billion) in 2010, according to the company's annual report, published on Monday. (See Huawei Reports 2010 .)

That marks a 24 percent increase in revenues compared with 2009, which were mainly driven by strong sales outside China as well as growth from its three key business units: telecom networks, devices and global services. Huawei achieved this growth during a period it called a "weak economic recovery." (See Huawei Doubles Profits in 2009.)

Regardless of how you label the economy, Huawei grew faster than its rivals in the telecoms infrastructure market -- Alcatel-Lucent (NYSE: ALU), Ericsson AB (Nasdaq: ERIC) and Nokia Networks . (See Ericsson Q4 Sales Surge, Margins Shrink , Signs of Growth at NSN and AlcaLu Reports Q4, Full Year.)

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Services growth
The global services division has become Huawei's fastest-growing business, with 2010 revenues up 28.6 percent to RMB 32 billion ($5 billion). Part of this growth is due to operators simply needing more varieties of professional services, according to the vendor. They not only need traditional network rollout and maintenance support, but also what Huawei calls "end user experience management," for example. Huawei noted it was particularly successful in professional services in China, the Middle East, South Pacific and Europe.

In the telecom networks business, Huawei's revenue grew 23 percent to RMB 123 billion ($18.8 billion). For radio access equipment, Huawei claims a global market share of 20 percent.

In the devices division, Huawei shipped 120 million units (3 million of which were smartphones) in 2010 and increased revenue 24.9 percent to RMB 31 billion ($4.7 billion) year-on-year. In the US and Japan, Huawei claimed revenue growth of more than 100 percent but didn't provide supporting figures. (See Huawei, ZTE: Global Devices With Nice Prices and MWC 2011: Huawei Is Not Low Cost!.)

A new Huawei
In the annual report's "Letter from the CEO," Huawei's Chief Executive Ren Zhengfei wrote that 2011 has been difficult so far with natural disasters, political conflict and economic challenges creating a tough environment for business development

To prepare, the 110,000-employee firm will restructure itself into four business units: Carrier Network, Enterprise Business, Device Business, and Other Business. The goal is to simplify the company's corporate structure as well as its management processes.

For the first time, Huawei revealed in its annual report the members of its board of directors, complete with profiles and pictures in an effort to be more open about its corporate structure and the executives who run the company. The board members were elected at the end of 2010, according to the report. (See Show & Tell: Huawei Turns 10, Huawei's Rep Repair, and Huawei's Open Letter to the US.)

— Michelle Donegan, European Editor, Light Reading Mobile

About the Author(s)

Michelle Donegan

Michelle Donegan is an independent technology writer who has covered the communications industry for the last 20 years on both sides of the Pond. Her career began in Chicago in 1993 when Telephony magazine launched an international title, aptly named Global Telephony. Since then, she has upped sticks (as they say) to the UK and has written for various publications including Communications Week International, Total Telecom and, most recently, Light Reading.  

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