Sales of 153m smartphones hurtle Huawei back into the black

30 Mar 2018359 Views

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The Huawei P20 smartphone, which was launched this week in Paris. Image: Karlis Dambrans/Shutterstock

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Shenzhen tech and comms giant Huawei is throwing down all its cards on big bets on R&D.

Chinese smartphone maker Huawei has reported a 28pc rise in profits in 2017 to $7.3bn (47.5bn yuan) after selling 153m smartphones worldwide.

This is compared with 2016 when profits flatlined to just 0.4pc growth.

‘Opportunities and challenges are popping up faster than ever before, and non-stop open innovation is the only way we can keep ahead of the game’
– KEN HU

Huawei, which this week launched its P20 smartphone to take on the Apple iPhone X and Samsung P9, is now the world’s third-largest smartphone maker.

The company attributed the profit to strong sales globally and in its home market of China as well as more disciplined cost controls.

Huawei is making solid headway but still needs to overcome domestic competition and rebuffs by US telecom networks that are skittish over anti-Asian tech sentiment from the White House.

The smartphone giant saw a net profit of $7.3bn based on revenues of $92.5bn.

Keep an eye on Huawei’s R&D engine

In 2017, Huawei’s annual investment in R&D reached $13.8bn, up 17.4pc compared with 2016.

‘Ultimately, we aim to bring digital to every person, home and organisation for a fully connected, intelligent world’
– KEN HU

The company’s total R&D spend over the past decade has exceeded $60.4bn, hurtling the company from nowhere in smartphones several years ago to a major challenger to Apple and Samsung.

“We’re on a new journey,” said Ken Hu, Huawei’s rotating CEO.

“Opportunities and challenges are popping up faster than ever before, and non-stop open innovation is the only way we can keep ahead of the game. Over the next 10 years, Huawei will continue to increase investment in technological innovation, investing more than $10bn back into R&D every year. We will actively pursue open collaboration, attract and cultivate top talent, and step up efforts in exploratory research. We want to better enable all industries to go digital and intelligent.”

Hu signalled the Chinese tech giant’s ambitions to enjoy similar growth in 5G and the internet of things as it has done from smartphones.

Most notably, he hinted at opportunities in digital transformation and enterprise. In 2017, Huawei’s enterprise business generated $8.4bn in annual revenue, an increase of 35.1pc compared with 2016.

Huawei set up a cloud business unit in 2017, which launched 99 cloud services across 14 major categories, and more than 50 solutions. The company also unveiled the Enterprise Intelligence platform and gained more than 2,000 cloud service partners.

“As we look to 2018, emerging technologies like the internet of things, cloud computing, artificial intelligence and 5G will soon see large-scale application,” Hu said.

“Throughout this process, Huawei will stay at the forefront of technological innovation and business transformation. More importantly, we will pay special attention to the practical challenges that our customers face as they go digital.

“Our job is to help them overcome these challenges and achieve business success. Ultimately, we aim to bring digital to every person, home and organisation for a fully connected, intelligent world.”

The Huawei P20 smartphone. Image: Karlis Dambrans/Shutterstock

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com