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

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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[email protected] 12/30/2016 | 12:09:34 PM
what are the key factors here? There are many theories about why Huawei is able to continue growing at such a dramatic pace ...

Cheaper and plentiful labor for R&D and support

Low pricing

Total dedication to delivering what customers want

Broad diversification (carrier, enterprise, devices)

Access to cheaper capital

 

But is it a combo or are one or more of these the deciding factors?
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