Ken Hu, Huawei’s current CEO. Photographer: Tomohiro Ohsumi/Bloomberg
There were at least a dozen signs one could gleam from the recent launch event of Huawei’s P20 flagship phone series and realize that the Chinese tech and telecommunications giant has made it as a premium consumer electronics brand: that the launch was held at the picturesque (and obviously not cheap to rent) Grand Palais; the over 2,000 members of the media in attendance; the dozens of Huawei billboards that are plastered all over Europe; and perhaps most importantly — the lack of surprise, shock or disappointment over the more than $ 1,100 price tag of the P20 Pro.
People — tech insiders, mostly — expected the top end model of Huawei’s smartphones to be at (even more than) the iPhones or Samsungs. And why not? Despite recent U.S. market issues, Huawei phones are doing well. In an annual business report meeting with journalists (including myself) held Friday morning in the company’s Shenzhen headquarters, Huawei announced that its total revenue grew 15.7% to $ 92.5 billion (or 603.6 billion yuan) in 2017. More impressively is that net profit actually grew 28.1% over that same time span to $ 7.3 billion, a huge improvement over 2016’s profit growth rate of 0.4%.
Huawei’s deputy chairwoman and chief financial officer Sabrina Meng, along with current CEO Ken Hu, told reporters there are two factors that explains how the company managed to bump up net profits and net profit margins at a rate higher than total revenue growth: the company became more efficient in cost and growing smartphone sales.
“In 2016, one of the biggest areas that dragged Consumer Business Group profits down were the high cost of components,” said Meng. “So we developed better a better supply management chain and improved our working relationships with vendors.”
Hu, meanwhile, added that whether it’s brand image with consumers, phone units sold, the company saw significant improvements in 2017. According to data released to the media, Huawei and sub brand Honor combined to sell 153 million handsets in 2017, generating $ 37.85 billion (237.2 billion yuan) in sales.
The triple camera Huawei P20 Pro.
The privately-owned Chinese company’s main bread and butter, however, is still selling network equipment, which generated roughly $ 47 billion (297 billion yuan) over the last year, though in terms of growth percentage, the 3% rate is tepid compared to years past or Huawei’s other departments. Huawei also saw a 35.1% growth in its enterprise business unit, which handles cloud and data, though the overall revenue figure of $ 8.7 billion (54.9 billion yuan) is small.
“>
Ken Hu, Huawei’s current CEO. Photographer: Tomohiro Ohsumi/Bloomberg
There were at least a dozen signs one could gleam from the recent launch event of Huawei’s P20 flagship phone series and realize that the Chinese tech and telecommunications giant has made it as a premium consumer electronics brand: that the launch was held at the picturesque (and obviously not cheap to rent) Grand Palais; the over 2,000 members of the media in attendance; the dozens of Huawei billboards that are plastered all over Europe; and perhaps most importantly — the lack of surprise, shock or disappointment over the more than $ 1,100 price tag of the P20 Pro.
People — tech insiders, mostly — expected the top end model of Huawei’s smartphones to be at (even more than) the iPhones or Samsungs. And why not? Despite recent U.S. market issues, Huawei phones are doing well. In an annual business report meeting with journalists (including myself) held Friday morning in the company’s Shenzhen headquarters, Huawei announced that its total revenue grew 15.7% to $ 92.5 billion (or 603.6 billion yuan) in 2017. More impressively is that net profit actually grew 28.1% over that same time span to $ 7.3 billion, a huge improvement over 2016’s profit growth rate of 0.4%.
Huawei’s deputy chairwoman and chief financial officer Sabrina Meng, along with current CEO Ken Hu, told reporters there are two factors that explains how the company managed to bump up net profits and net profit margins at a rate higher than total revenue growth: the company became more efficient in cost and growing smartphone sales.
“In 2016, one of the biggest areas that dragged Consumer Business Group profits down were the high cost of components,” said Meng. “So we developed better a better supply management chain and improved our working relationships with vendors.”
Hu, meanwhile, added that whether it’s brand image with consumers, phone units sold, the company saw significant improvements in 2017. According to data released to the media, Huawei and sub brand Honor combined to sell 153 million handsets in 2017, generating $ 37.85 billion (237.2 billion yuan) in sales.
The triple camera Huawei P20 Pro.
The privately-owned Chinese company’s main bread and butter, however, is still selling network equipment, which generated roughly $ 47 billion (297 billion yuan) over the last year, though in terms of growth percentage, the 3% rate is tepid compared to years past or Huawei’s other departments. Huawei also saw a 35.1% growth in its enterprise business unit, which handles cloud and data, though the overall revenue figure of $ 8.7 billion (54.9 billion yuan) is small.