Friday, 27 April 2018

Huawei boosts R&D to strengthen its market share

By Chris Kelly, Total Telecom
Tuesday 17 April 18

Last year, Huawei invested CNY89.7 billion in research and development

Huawei is set to increase its research and development budget to 15 per bet of its annual revenues, as it looks to strengthen its market share in the global telecommunications sector. Speaking at the company's annual Huawei Analyst Summit in Shenzhen, Eric Xu, rotating chairman of Huawei, said that the company must help to drive innovation…

Huawei is set to increase its research and development budget to 15 per bet of its annual revenues, as it looks to strengthen its market share in the global telecommunications sector.

Speaking at the company's annual Huawei Analyst Summit in Shenzhen, Eric Xu, rotating chairman of Huawei, said that the company must help to drive innovation.

"We think that technological innovation is a key driver for our future growth. We pledge to invest 15 per cent of our revenue into research and development to safeguard our market share," he said.

"We want Huawei to be a pioneer in a fully connected smart world," Xu added.

By 2025, Huawei estimates that there will be 6.5 billion mobile phone users across the world, compared with 4 billion today. The number of smartphones will increase from 5 billion in 2018 to 8 billion in 2025.

The company expects strong growth in its consumer business group over the next few years and has actively upped its game in terms of smart phone handset sales. With the company's proposed play for the US market on hold, following recent US legal action, Huawei will be targeting strong growth in European and Asian markets.

Xu also predicted strong growth in the mobile broadband market, underpinned by the launch of 5G. By the year 2025, Huawei predicts that 80 per cent of mobile users will have access to mobile broadband. Crucially, Huawei is also predicting exponential growth in the average amount of data consumed by users across the globe. The global average of per capita data consumption in 2018 was just 0.03 GB per month (when factoring in data from less developed markets). By 2025, Huawei estimates that that figure will have rocketed to over 1GB per month for the average user.

Huawei is also forecasting growth in the fixed line market, predicting that penetration levels for gigabit capable home broadband services will rise from less than 1 per cent on 2018 to 30 per cent by 2025. By 2025, the company estimates that broadband penetration levels as a whole will it 75 per cent.

Huawei believes that by investing in R&D and setting out its strategy to 2025, the company will be able to strengthen its hold on the telecommunications market in the years to come.

"In an age defined by greatness, we want to help mankind take the next step forward," said Xu.   

 

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