Huawei profit rises to 47b yuan for 2017

Huawei's carrier, consumer, and enterprise business groups all rose during the year, with the Chinese networking giant only seeing a revenue drop in the Americas region.
Written by Corinne Reichert, Contributor

Huawei has announced a full-year net profit of 47.5 billion yuan for 2017, up 22.7 percent from the 37.1 billion yuan reported a year earlier, attributing the result to its smartphones, enterprise solutions, and the digital transformation across industries.

The Chinese networking giant brought in 603.6 billion yuan ($92.5 billion) revenue during the year, up 15.7 percent from 521.6 billion yuan in 2016.

A breakdown of its revenue saw its carrier business grow by the smallest amount, rising by just 2.5 percent year on year to bring in 297.8 billion yuan.

"Through advancements in technology like 5G, we are helping telecom networks connect more people, more homes, and more organisations. Ultimately, we aim to position telecom networks as the basic infrastructure of the digital world," Huawei rotating CEO Ken Hu said in the results report [PDF], with Huawei unveiling its first 5G customer premises equipment during MWC in February.

During the year, Huawei said it conducted pre-commercial 5G tests with more than 30 carriers in over 10 cities; signed more than 350 network function virtualisation (NFV) and 380 software-defined networking (SDN) contracts; deployed over 30 CloudAIR commercial networks; rolled out more than 500,000 narrowband Internet of Things (NB-IoT) base stations across the globe; worked with 1,000 partners on its "IoT ecosystem"; and shipped over 1 million Boudica NB-IoT chips per month.

As of the end of 2017, Huawei had also deployed more than 120 4.5G networks across the world, including for Deutsche Telekom, China Telecom, LG U+, and EE.

"5G has entered the commercial deployment stage. The Internet of Things (IoT), video, cloud, and other innovative technologies are seeing widespread adoption and reshaping every industry," Huawei added, remaining positive that it will continue seeing growth across the carrier business.

Huawei's enterprise business, meanwhile, jumped by 35.1 percent year on year, from 40.7 billion yuan to 54.9 billion yuan, with the company saying it will maintain growth by utilising its expertise across cloud, big data, IoT, and artificial intelligence (AI) "to provide customers with open, flexible, and secure ICT infrastructure platforms" that "facilitates digital transformation".

According to Huawei, as of the end of 2017, it has been chosen as the "partner for digital transformation" by 197 of all Fortune 500 companies, as well as serving more than 300 financial institutions across the globe.

Also part of its enterprise business group, Huawei said it had helped over 120 cities in 40 countries and regions to implement smart city projects during the year; provided its safe city solutions to more than 230 cities across 90 countries in Europe, Asia-Pacific, Latin America, and Africa; deployed its smart grid energy solutions in 73 countries and regions; and used its smart traffic solutions across 220,000km of railways and highways.

Its smart education solutions have also been adopted in more than 500,000 primary and secondary schools and 600 universities and scientific research institutes across 70 countries and regions.

"As of the end of 2017, Huawei has signed more than 500 commercial enterprise wireless contracts," the networking giant added.

"Huawei is establishing a partner ecosystem that covers channel partners, solution partners, service partners, talent alliances, and investment and financing partners. At the end of 2017, we had more than 13,000 channel partners, 860 solution partners, and 2,900 service partners working with us around the world to deliver solutions to enterprises."

Lastly, Huawei's consumer business group was up by 31.9 percent from 179.8 billion yuan to 237.2 billion yuan, with the company having shipped approximately 153 million smartphones during the year under its dual Huawei and Honor brand strategy.

"Huawei and Honor smartphones together secured more than 10 percent of the global market share. We are now firmly positioned among the top three phone makers in the world," it said.

"With superior mobile services, our user base continues to expand. As of Q4 2017, Huawei's mobile service users surpassed 340 million, with over 30 million in markets outside of China."

On the consumer front, Huawei Pay is now used across 66 banks, and for public transport in Beijing, Shanghai, Guangzhou, Shenzhen, Suzhou, Wuhan, and Guangxi; and tablet shipments were up by 40 percent "despite an otherwise sluggish market".

Huawei is also working across over 300 products on its HiLink smart home ecosystem, it said, in partnership with 80 brands.

"In 2018, we will continue to innovate in core technologies -- including AI, AR, and VR -- to guide evolution from smart devices to intelligent devices," the company said.

It is also continuing its research and development (R&D) initiatives, with 80,000 Huawei employees or 45 percent of the workforce now working across R&D. During 2017, it spent 89.7 billion yuan -- 14.9 percent of its total yearly revenue -- on R&D, and 394 billion yuan over the last 10 years.

As of the end of December, Huawei held 74,307 patents.

The Chinese market still makes up the most of Huawei's revenue, pulling in 305.1 billion yuan during the year, a rise of 29 percent, thanks to smartphone growth, ongoing 4G network rollouts, and its enterprise solutions.

Huawei made 163.9 billion yuan in revenue from the Europe, Middle East, and Africa region, up 4.7 percent, which it attributed to "the accelerated pace of digital transformation amongst enterprises and a growing share of the smartphone market".

The only region where Huawei made less revenue during 2017 was in the Americas, which was down by 10.9 percent to 39.3 billion yuan due to "fluctuations in telco investment cycles in Latin America".

Asia Pacific made the company 74.4 billion yuan in revenue, growing by 10.3 percent thanks again to enterprise digital transformation and growing smartphone market share.

Huawei Australia CEO George Huang told ZDNet in February that he is looking to push the company locally through 5G and by entering "many industries" including mining, oil, gas, agriculture, and transportation to enable their digital transformation.

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