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Huawei Aims for $100B Annual Revenues

Huawei Technologies Co. Ltd. aims to increase its annual revenues to more than US$100 billion per year within the next 10 years by expanding its target market beyond communications service providers, company executives told attendees at its annual analyst conference in Shanghai on Wednesday.

The Chinese vendor, which just announced revenues of 185.2 billion yuan renminbi ($28.3 billion) for 2010, estimates its 2011 revenues will reach RMB199 billion ($30.6 billion) and will continue to grow to more than RMB650 billion ($100 billion) within 10 years. (See Huawei Expands Its Horizons and Huawei Profits Climb 30% in 2010 .)

How can it deliver that level of growth? By targeting enterprise customers with cloud services capabilities and by selling smartphones directly to the public, the company believes. In fact, its device strategy is so aggressive it thinks it can be a top-five handset firm by 2013. While that may sound ambitious, the market share table below shows it would only need to double its current market share to achieve that goal.

Table 1: Worldwide Mobile Device Sales to End Users in 2010
Ranking Company 2010 unit sales in millions 2010 market share 2009 market share
1 Nokia 461.3 28.9 36.4
2 Samsung 281.1 17.6 19.5
3 LG Electronics 114.2 7.1 10.1
4 Research In Motion 47.5 3.0 2.8
5 Apple 46.6 2.9 2.1
6 Sony Ericsson 41.8 2.6 4.5
7 Motorola 38.6 2.4 4.8
8 ZTE 28.8 1.8 1.3
9 HTC 24.7 1.5 0.9
10 Huawei 23.8 1.5 1.1
Others 488.6 30.6 16.5
Total 1,596.8 100 100
Source: Gartner Inc.




Huawei calls its new strategy "Cloud-Pipe-Device." While that sounds like a mantra from Woodstock, it shows that the network operators (the "pipe") are just part of Huawei's target market now.

The vendor, in a press statement issued today, says it has "introduced a new organizational structure centered around these three key drivers of growth [cloud computing, network, and device] that will enable it to further expand its presence in the operator space, enhance the strength of its device brand, and extend its reach in the enterprise segment."

Huawei is known for having grown dramatically in the past few years, but boosting annual revenues by more than 300 percent over the next 10 years appears bullish if that growth is organic.

There's always the chance, though, that Huawei may look to boost its enterprise capabilities with some significant acquisitions, and there appears to be at least one major enterprise technology unit up for sale currently. (See AlcaLu Seeks Buyer for Enterprise Biz.)

So is Huawei interested in Alcatel-Lucent (NYSE: ALU)'s enterprise division? Light Reading is in Shanghai this week, but currently camped outside the vendor's conference doors (as the event is restricted to analysts, with pestering journalists not eligible). But we hope to catch some Huawei executives later today to find out and dig a bit deeper.

— Ray Le Maistre, International Managing Editor, Light Reading

digits 12/5/2012 | 5:06:31 PM
re: Huawei Aims for $100B Annual Revenues

Thanks Stela. We'll use the Gartner numbers as a 'rough guide' then -- even if they are a few million off here and there, the table shows that Huawei has some work to do to get into the top 5 and is clearly a long way off being anywhere near the top of the table. 

digits 12/5/2012 | 5:06:39 PM
re: Huawei Aims for $100B Annual Revenues

Huawei's Chief Marketing Officer Richard Yu left the analyst conference before I had a chance to grab him but I'm still hoping to find a senior figure here in Shanghai to provide some further depth/insights.... this certainly sounds like a grand plan on Huawei's part!!

stelabokun 12/5/2012 | 5:06:39 PM
re: Huawei Aims for $100B Annual Revenues

Hi Ray! Just a quick comment…Not so sure about those numbers you got from Gartner. Nokia reported shipments of 452.9m for the entire year 2010 – I’d be surprised if their sales to end users (sell-through) exceeded the shipments by 8m (that assumes that Nokia sold a millions of phones that were left in stock in 2009, plus every single phone that was shipped in 2010; the last time I checked, Nokia wasn’t doing soooo well). Sell-through (sales to end users) are typically slightly lower than shipments, and not 8m higher. Apple sounds a bit too high too (total shipments for 2010 were at 40m).


Cheers,


Stela

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