Sunday, 25 August 2019

Huawei: We are fighting for survival while simultaneously seeking growth

By Chris Kelly, Total Telecom
Tuesday 30 July 19

US sanctions against Huawei have had only a limited effect on the Chinese tech giant’s financial performance in H1 2019, according to senior company figures

Huawei has released a strong set of figures for the first half of 2019, posting revenue growth of over 23 per cent, despite facing a plethora of challenges this year. Total revenues stood at $58.3 billion (CNY401.3 billion), a 23.2 per cent increase on last year’s H1 figures. This year, Huawei has faced a flurry of allegations from the US over the security of its network equipment, with the US lobbying its allies to ban the Chinese tech giant from their 5G network rollout…

Huawei has released a strong set of figures for the first half of 2019, posting revenue growth of over 23 per cent, despite facing a plethora of challenges this year.

Total revenues stood at $58.3 billion (CNY401.3 billion), a 23.2 per cent increase on last year’s H1 figures. This year, Huawei has faced a flurry of allegations from the US over the security of its network equipment, with the US lobbying its allies to ban the Chinese tech giant from their 5G network rollout.

Despite this pressure, network operators have stuck by Huawei, particularly in the key markets of Western Europe, which has allowed Huawei to continue its exponential growth into the first half of 2019.

“Even in the toughest conditions, we have remained faithful to our ideals… When an organisation is under the greatest pressure, that is when it unleashes its greatest potential. In a way the US government’s pressure on Huawei has helped us to understand our objectives better. It has enhanced collaboration internally across different departments and it has also reinvigorated the company. We are now at a historical moment for the company,” Dr Liang Hua, chairman of the Huawei board, said at a press conference in Shenzhen.

Huawei execs were decidedly upbeat as they presented the figures for H1 2019. Despite challenging market conditions, the company registered a net profit margin of 8.7 per cent.

“We believe we will get through this difficult period and return to a period of strong growth…  greater collaboration with our partners around the world can only help this,” Hua added. 

In its Carrier Business Group, Huawei saw H1 sales hit 21.28 billion (146.5 billion). Huawei shipped 150,000 5G base stations to international and domestic markets in the first half of 2019, with ambitions to up that figure to 500,000 by the end of the year.  

“We are extremely confident in our ability to rollout and deploy 5G across the world”, Hua said. 

In its Consumer Business Group, Huawei recorded revenues of $32.08 billion (CNY220.8 billion), shipping 118 million smartphone handsets (including the companies Honor brand) to the market. Huawei consolidated its position as the world’s second biggest supplier of smartphone handsets to the global market, while simultaneously strengthening its position in the Chinese market.

“Huawei is the only smartphone vendor to show growth in its Q2 handset unit sales [in China]. We grew by 30 per cent. Other vendors are seeing double digit declines in their handset sales. This says a lot about the quality of our product – if consumers don’t like a product, they just won’t buy it.

“We aren’t really that preoccupied with market share of the handset market in China. I don’t predict their being any one single provider who will completely dominate the market,” Hua said.

In terms of the international market, Huawei’s sales have taken a decided hit following their addition to the US’ entity list. However, Hua said that sales were already beginning to rebound.

“If US operators don’t let us use US software, we have the capability to make our own. However, our preference is always to continue to use Android.

“There has been a decline in smart phone sales overseas but they have now risen back up to 80% of what they were before we were added to the entity list,” Hua said. 

Also in the news

Apple lines up three 5G iPhones for launch in 2020 

UK government passes up the opportunity to ban Huawei from its 5G networks 

UK Govt: There is no technical reason for us to ban Huawei from 5G 

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