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Another Bumper Year: Huawei Sales Soar 32% to $74.8B

Robert Clark
News Analysis
Robert Clark
12/30/2016
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The Huawei juggernaut rolls on. The Chinese vendor is set to report another bumper year, with an expected 32% year-on-year spike in revenues to 520 billion yuan (US$74.8 billion).

Eric Xu, one of the Chinese vendor's three joint CEOs, revealed the numbers in a year-end letter posted on the company's website.

A detailed breakdown of the 2016 revenues was not provided. In 2015 Huawei Technologies Co. Ltd. reported a 37% year-on-year rise in revenues to RMB395 billion, driven by a 73% spike in handset sales and a 21% rise in sales to network operators. It also reported a net profit of RMB36.9 billion. (See Huawei Profits Soar Despite Forex Hit.)

Xu's letter cited the carrier business unit's focus on "cloud, video, and operations transformation" during the year as well as internal improvements, including in the supply chain and "working capital efficiency." He cited cloud computing, IoT, video, big data and AI (artificial intelligence) as key areas of industry innovation.

But Xu's letter also showed signs that company is experiencing some of the challenges that come with significant growth and business success. He calls on staff to increase efficiencies and cut back on costs while engaging in more "meaningful meetings with customers to address their real problems."

And despite the healthy financials in a year during which its biggest rivals have struggled, he cautions against over-confidence. "Avoid blind optimism and rhetoric about Huawei as an industry leader or how it has entered uncharted territory… Don't cling to what has worked or what we've gained previously. Past success is not a reliable indicator of the future, and a long list of accomplishments might end up nothing more than an epitaph," he states. (See Nokia Forecasts Sales Decline in 2017, Shares Fall and Ericsson Swings to First Net Loss in 4 Years.)

— Robert Clark, contributing editor, special to Light Reading

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Michelle
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Michelle,
User Rank: Light Sabre
1/1/2017 | 5:31:44 PM
Re: Huawei Challenges
Agreed. They must be careful to move forward in such a way that enables innovation while still running efficiently. They are certainly a company to watch in the coming years. 
danielcawrey
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danielcawrey,
User Rank: Light Sabre
1/1/2017 | 12:12:55 PM
Re: Huawei Challenges
These are great numbers, but larger organizations like Huawei have to be careful to not become too bloated. All great companies are able to sustain operational efficiency while growing revenues. 

Let's see if Huawei is able to accomplish this. 
Michelle
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100%
Michelle,
User Rank: Light Sabre
12/31/2016 | 7:58:24 PM
Re: Huawei Challenges
@freehe Do you see any particular challenge as being more urgent to tackle than another? 
freehe
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freehe,
User Rank: Light Sabre
12/30/2016 | 7:01:36 PM
Huawei Innovation
Huawei continues to prove it is a leader in the market. Offering cloud, vidoe and operations transformation as well as IoT, video, big data and AI.

Curious to see the future of Huawei.
freehe
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0%
freehe,
User Rank: Light Sabre
12/30/2016 | 6:56:35 PM
Huawei Challenges
Huawai will need to quickly address their challenges to ensure they remain successful and competitive, retain customers and reduce churn.

"He calls on staff to increase efficiencies and cut back on costs while engaging in more "meaningful meetings with customers to address their real problems."

 
freehe
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freehe,
User Rank: Light Sabre
12/30/2016 | 6:55:06 PM
Huawai Success Tips
""Avoid blind optimism and rhetoric about Huawei as an industry leader or how it has entered uncharted territory... Don't cling to what has worked or what we've gained previously. Past success is not a reliable indicator of the future, and a long list of accomplishments might end up nothing more than an epitaph," he states."

This is advice that every company and business owner needs to follow. Great insight.
freehe
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0%
freehe,
User Rank: Light Sabre
12/30/2016 | 6:52:38 PM
Re: what are the key factors here?
@Ray, good points to consider regarding Huawai success.
TV Monitor
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0%
TV Monitor,
User Rank: Light Sabre
12/30/2016 | 6:24:53 PM
Re: what are the key factors here?
sarcher60555

"imagine if Huawei had equal access to USA markets!"

That would be the day Chinese communist party has access to all your phone call list, messages, and photo due to the legally mandated backdoor included in all Chinese brand phones and network equipment.
TV Monitor
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0%
TV Monitor,
User Rank: Light Sabre
12/30/2016 | 6:23:10 PM
Re: what are the key factors here?
[email protected]

Huawei's success is based on two factors.

1. Extremely attractive loan package for Huawei and ZTE network deployments from Chinese state banks that other vendors cannot match.

2. Negative margin smartphone race in China, where everyone but Apple and Samsung are selling below cost.
sarcher60555
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100%
sarcher60555,
User Rank: Lightning
12/30/2016 | 12:16:04 PM
Re: what are the key factors here?
Imagine if Huawei had equal access to USA markets!
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