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Huawei Expects 2015 Revenues of $56B

The Huawei juggernaut is showing no signs of slowing down. Having recently announced that it's on course to announce a near 20% year-on-year increase in revenues for 2014, to about $46.5 billion, the vendor's founder told the World Economic Forum in Davos that Huawei expects its revenues to grow by a further 20% this year to $56 billion. (See Huawei Boosts Operating Income by 17% and Huawei Puts Its Rivals to Shame.)

In his first public appearance in the West, Ren Zhengfei, the company's founder, deputy chairman and CEO, told the Forum during an on-stage (translated) interview with BBC correspondent Linda Yueh that Huawei Technologies Co. Ltd. is confident of reaching total revenues of $56 billion this year, despite forecasts of slower economic growth in China, still the most important single market for Huawei.

Such rapid growth comes with major challenges, though, he noted. The main pressures on Huawei come from "growing so fast," and corporate governance is a major issue at the company. Ren admitted that Huawei had "pardoned" about 4,000 staff (mostly senior) during the company's lifetime (it was founded in 1987) for breaches of corporate conduct, including corrupt practices such as filing false sales numbers. But "we can't stop growing just because of the challenges of corruption," he added.

He also addressed a number of sensitive issues related to security, the US market and Huawei's ownership.

  • Despite the barriers to Huawei's participation in major network projects in the US, Ren refused to be critical of how his company has been treated. "I never think that the US is not fair to Huawei. The US is committed to openness … Huawei can learn from the US," he noted. (See Huawei Names US Lead, Reminds Us It's Still Here, Security Concerns Cling to Huawei, US vs Huawei/ZTE: The Verdict and Huawei, ZTE Spook Sprint?)

  • Ren said that Huawei has never been asked by the Chinese government to tap into US networks or anyone else's networks and that the vendor would not have the ability to do so. He added that Huawei would never "compromise any country or government," and that the vendor has a very strict focus on compliance and adhering to rules and regulations. (See NSA Reportedly Spying on Huawei: What's Chinese for 'Ironic'? )

  • In response to questions about whether Huawei is owned in part or controlled by the Chinese army -- Ren was in the Chinese military engineering corps in the 1980s -- he denied that anyone outside of Huawei owned any stake in the vendor. He said he is the single biggest shareholder, yet holds just a 1.4% stake in the company. He stated that there are many "misperceptions" about Huawei, both outside and inside China.

    Ren and other senior Huawei officials can expect questions about ownership, security and the US market to persist while it continues to grow and be a competitive threat to an increasing number of established companies as it branches further into the enterprise IT and mobile device sectors. But even on such issues, Ren was conciliatory: "We don't see anyone as rivals -- we see them as partners," he said with a wry smile.

    — Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

  • sowen557 4/15/2015 | 12:45:37 PM
    Re: Translation update - 4,000 pardons over many years, not just in 2014 How many Senior Staff have rotated through the doors of Huawei since '87?  20000?  A 25% turn over of those who were caught! (Mostly Senior!!)  Seems really huge to me.  You would have thought more senior people would have sacraficed low level plebs instead of taking the honorable death.

    "Ren admitted that Huawei had "pardoned" about 4,000 staff (mostly senior) during the company's lifetime (it was founded in 1987) for breaches of corporate conduct, including corrupt practices such as filing false sales numbers. But "we can't stop growing just because of the challenges of corruption,"
    Kruz 1/25/2015 | 3:25:09 PM
    Re: Growth and its challenges It seems what contributed mainly to Huawei's revenue growth is the consumer business(smartphones). Huawei's 2014 revenue from this business went up 32% from the previous year.
    kq4ym 1/23/2015 | 11:42:12 AM
    Re: Growth and its challenges And how reliable can we guess the 20% growth is in reality? With some thinking back to "corrupt practices such as filing false sales numbers" in the distnat past and the uncertainty of the Chinese economy's ability to continue like it has for the past decade, maybe this is more hope and wishing than a reality? But, it they can keep it up as forcast, that's one problem we'd all like.
    [email protected] 1/22/2015 | 8:44:18 AM
    Translation update - 4,000 pardons over many years, not just in 2014 Ren was speaking in Chinese (as you would imagine...) and was being translated.

    It seems the translator mistakenly said that 4,000 Huawei staff had been pardoned in 2014, whereas it is 4,000 staff during Huawei's existance, rather than in just one year. The article has been updated to reflect this.
    [email protected] 1/22/2015 | 6:29:30 AM
    Growth and its challenges So Ren talked about sales growth and its challenges -- that's a lot of people to be pardoning...

    What he didn't get into is where this growth is coming from -- domestic or international, handsets and enterprise mostly and little from carrier networks?

    It will be interesting to see how the shape of Huawei's business changes in the next few years and what inpact the end of 4G rollouts in China will have to Huawei's numbers.

    But however you look at it -- have ing 20% revenue growth is one of the better problems to have, it would seem. 
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