Can Huawei build a $14bn devices business by 2017?

Can Huawei build a $14bn devices business by 2017?

Summary: Huawei is hoping for an uptick in the growth of its smartphone business over the next five years, even as some of its networking rivals abandon the space.

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Huawei's consumer device business is small in comparison to networks business today, but unlike its main Nordic rivals, the company is hoping to see smartphones play a larger role in its bottom line within five years.

Today, carrier network equipment accounts for 73 percent of the $35.4 billion Huawei says it made in 2012, but by 2017 it's projecting networks will account for just 60 percent of revenues, sidelined by consumer device and enterprise sales, which today account for 22 percent and five percent, respectively.

Speaking to media at Huawei’s R&D facility in Stockholm's Kista technology park on Wednesday, Huawei vice president of Western Europe sales Gaston Khoury said that its consumer devices and  enterprise businesses would drive the company's projected 10 percent growth in revenue each year over the coming five years.

By then, he said that Huawei's consumer devices unit, which include its new smartphones and established routers buinesses, would account for 25 percent of revenue, while enterprise is expected to have grown to 15 percent. Despite a small rise in consumer share of revenues, the projected overall growth means its devices revenues are expected to double from today's $7.8bn a year to $14.2bn.

The Chinese company's push to have its own-branded smartphones brand comes as its main rivals in mobile networks, Nokia and Ericsson, withdraw from the mobile phone business.

Previously a manufacturing (ODM) supplier to other brands, since 2012 Huawei has released several of its own  smartphones under the Ascend brand, the most recent being its mid-range Android Ascend P6 which retails in the UK for around £310. There's even a Windows Phone Ascend W1, but like most other hardware makers on that platform besides Nokia, it barely sells any.

The bulk of Huawei's devices are of course Android, and according to Khoury, Huawei sold 32 million smartphones in 2012 — the year it launched the Ascend P1 and Ascend D1 Quad and shipped between five and six million smartphones each quarter by IDC's numbers.

And while still well behind Korean smartphone king Samsung, it looks set to hit 40 device shipments million this year, having sold 20 million in the first half of 2013, according to the analyst firm. 

Like Samsung, Huawei has also tapped the Nordics to spur better software and performance of its devices, late last year opening its an R&D facility in Nokia's hometown, Helsinki. Meanwhile, its R&D facilities in Sweden's capital and Lund in the south also contribute to its smartphone developments. 

Further reading

Topics: Networking, 4G, Mobility, Huawei

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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3 comments
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  • Countercyberespionage 101

    Rule 1) Make your enemy's head explode.

    Therefore, I purchased two cheap Huawei droids on prepay for my teenage daughters.

    If enough teens are provisioned with these phones, we'll soon be detecting Chinese government brain splatter drifting alongside Japanese radioactive spillage. Brilliant!

    This assumes of course that they are listening as closely on the phones as they allegedly are on their enterprise gear
    (see
    http://www.informationweek.com/hardware/data-centers/huawei-faces-uphill-battle-in-enterprise/240155488)
    Skibum
  • Nobody in the smartphone business, should ever make predictions beyond

    6 months.

    The tech business is very volatile and very dynamic and in constant flux. Predictions for any sub-sector of the tech sector, are only valid for about 6 months, perhaps 12 months, top. Palm and BB/RIM likely had projections going into several years into the future, but, where are they now? Same applies to any sub-sector, including tablets and PCs and smartphones and OSes. People making predictions in the tech sector are just hoping to make things happen, or to direct the industry in certain directions.
    adornoe@...
    • Good to know that :)

      Again your level of contradiction is just amazing :)
      You should review your prediction, I believe I can find many of them with more than 12 months.
      I can even find a post from you saying you don't make short term predictions :)
      AleMartin