Huawei Rising: 2016 H1 Revenues Up 40%

Huawei continues its impressively rapid progress and posts a first half of the year revenue growth of 40% (to ~$36.6B). Last year at the same period, the revenue growth was 30%, so the pace has accelerated, and Huawei said that it is “confident” that the momentum will continue. For the year 2016, Huawei expects to reach a yearly revenue of $75B.

Observers speculate that the growth is coming mainly from the handset business which has seen strong launched recently in all price segments. Research firm Gartner says that Huawei’s worldwide handset share is now 8.3%, up from a 5.4% share just a year ago. The jump places Huawei in third place in market share, behind Apple (15%) and Samsung (23%).

This is because demand for infrastructure is said to have slowed down to some extent. To compensate for this, Huawei will work on extending its (infrastructure and professional) software and services offering that bring high margins and recurring revenues. Huawei’s claim to fame is that it has deployed 50% of the world’s LTE infrastructure, which makes it one of the most powerful telecom companies in the world.

The gross margins have gone down from 18% to 12%, but Huawei says that it is due to ongoing investment to “support future growth”. At this time, Huawei his not reported its net profit. In China, the competition is extremely stiff, with companies such as Oppo being given the title of “top Chinese handset seller” according to Counterpoint (other research companies may disagree), but overall, it’s clear that as a group, 8 Chinese handset makers are among the top 12 in the world.

Hubert Nguyen
Categories: Cellphones
Tags: business, Huawei