Huawei expects network equipment sales to rise

Estimates are lower than previous optimistic targets, which may be indicative of the company's situation with the United States.
Written by Charlie Osborne, Contributing Writer

Despite elements of mistrust present between Huawei and the U.S., the telecoms equipment maker expects networking equipment sales in the enterprise market to rise.

The world's second-largest telecoms equipment maker believes that sales of enterprise-directed networking equipment will rise to $10 billion by 2017, although this is $5 billion lower than last year's executive expectations. Last year, Huawei's enterprise division generated sales worth $1.9 billion.

Eric Xu, Huawei executive vice president told Reuters:

"If we can achieve $10 billion (6 billion pounds) sales by 2017, that will be good enough for me."

In addition, the Huawei executive expects the firm to generate between $800 million and $1 billion in IT business revenue this year.

Earlier this month, Huawei executive Bob Cai admitted that the company is not expecting a significant growth margin in the U.S. market this year. Although Cai expects demand to stay strong in the Asian and European markets, recent security concerns have resulted in officials in both the U.S. and Europe advising against purchasing the company's products if they are to be integrated within business or government infrastructure.

Two reports, released by the U.S. House of Representatives Intelligence Committee and the European Commission, suggested that Huawei networking equipment could pose a security risk, as malicious code allegedly could be built into the system and then used for illegal surveillance.

The company has denied these allegations, but the damage is done. Effectively being "shut out" of potentially large, lucrative markets in this manner is no doubt injurious to the company's prospects of profit and expansion. However, according to the executive, demand for Huawei products remains solid outside of the United States. In addition, Huawei is attempting to woo the Australian market, urging investors to try and think of the country as more than simply a place to manufacture IT equipment.

This month, Huawei rolled out its own bring-your-own-device (BYOD) software suite to the enterprise market and 30,000 of its own employees. However, the firm and its battered reputation is likely to find it tough to compete in the enterprise software market which already hosts rival firms including Citric and IBM.

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