Huawei Sees Record Breaking Revenues, Eyes High-end
Recent performance records from Huawei revealed that their revenues have increased by 30% between the years of 2013 and 2014. Believe it or not, their sales are now worth $12.2 billion (MYR442.18 billion)! This is the first time that they have went over $10 billion mark(MYR346.25 billion)!
One of the key elements causing the rapid increase in growth was because of Huawei’s increasing yearly shipments on their smartphone range by 45%. In total, their device shipments have increased by 7.8% – reaching 138 million shipments round the world in 2014. About 75 million of these shipments were from smartphones alone. Huawei is said to be positive in maintaining the momentum this year. A lot of their mid-tier devices such as Honor series also generated quite a number of sales.
Looking at their sales, Huawei is doing well and have strong growth in its mid-range to high-end tier of their products. They have 18% growth for shipments of devices that falls under that category. The devices that contribute for this growth includes Ascend P7, of which have sold 4 million units of the device within 6 months of its launch. Another key contributor is Ascend Mate with 2 million units sold from their launch in September.
To keep their momentum in growth and revenues, they are keen to continue prioritizing this category of product to be a contender. As according to Richard Yu, Huawei’s CEO, their strategy for 2014 to focus on mid to high end range products has been successful, “resulting in significant achievements” in product R&D departments, brand awareness, channel development, and growth in market share. These results in consolidating their position in the smartphone market as the third biggest manufacturer of smartphones.
With this, Huawei becomes unconvinced of the activities of low-margin smartphone manufacturing, especially in the low end market. Yu has predicted that in about 3 to 5 years time, more low-cost Chinese vendors might be out played of the market as they are unprofitable enough. If they were to sell more low-end phones, they will be able to double shipments, but “in the low-end market there’s no margin,” Yu said.
Huawei targets another 25% more growth for smartphones this year. It won’t be easy down the road as they face a great competition from other growing Chinese vendors, especially Xiaomi.