CEO Interview: Huawei's Eric Xu
The five-year view
Ray Le Maistre, Light Reading: Huawei has been growing significantly in multiple sectors in the communications technology market for a number of years now. What is the company's strategy for the next five years and how important will the emerging markets such as Africa and Latin America be in terms of delivering medium-term sales growth?
Eric Xu, Huawei: We have been working on a five-year strategy plan for the three businesses in our overall portfolio -- carrier, enterprise and consumer. The carrier business will have a relatively lower growth rate, very possibly single digit growth -- even a 10% growth would be a stretched target to work on.
The enterprise business will grow very fast in the coming years and will become a major growth driver for our B2B business. I think it's possible for us to achieve a 30% annual growth for the enterprise business.
Similarly the consumer business will also grow very fast. But the consumer business is one that can suffer considerable fluctuation. If everything goes right it's possible that the consumer business could grow at 30% year on year.
So if you look at all the three businesses combined, the future growth will primarily not be coming from the emerging markets. The enterprise business is closely related to the GDP of a country -- the higher the GDP the better the market opportunity for the enterprise business. For smartphones we are now moving towards more premium, higher-end brands in our business and the markets where there will be demand for these will be the more economically developed markets.
Therefore if we look at future growth from a regional perspective, apart from the US market I think the markets with pretty robust economic growth with strong purchasing power will be the major source of growth for Huawei's business.
RLM: But Huawei is still focused on growing its business in Africa, Latin America and the emerging markets in South-East Asia?
EX: That is not clearly articulated in our strategy for the last couple of years. A more accurate expression would be that we focus on all the markets outside the US.
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