Huawei to focus more on smartphone business
By Kim Bo-eun
Huawei Rotating CEO Eric Xu speaks at the Huawei Global Analyst Summit in Shenzhen, China, Wednesday. Xu said the telecommunications equipment company will increasingly focus on its consumer device business, to seize the opportunities presented by LTE technology. / Courtesy of Huawei
SHENZHEN, China — Chinese telecommunications equipment giant Huawei will increasingly focus on its consumer business, specifically smartphones, to seize the opportunity provided by the growing usage of long-term evolution (LTE) technology.
“We plan to scale down the proportion of our carrier network business to 50 to 60 percent and increase our focus on the consumer business,” said Huawei Rotating CEO Eric Xu at the Huawei Global Analyst Summit here, Wednesday.
The Shenzhen-based telecommunications equipment company manufactures products for carrier networks, enterprises and consumers. Currently, its carrier network business takes up 70 percent of its portfolio.
Huawei’s sales revenue has grown steadily over the years, and grew by 8.5 percent to $39.5 billion in 2013, from $36.4 billion a year earlier. The sales revenue of its consumer business, which was launched in 2011, grew by 17.8 percent to $9.1 billion in 2013 from $7.7 billion in 2012.
“We are transforming from B2B to B2C — building a brand that people know,” said Shao Yang, vice president of marketing, consumer business, at the summit.
Seizing opportunity of growing LTE usage
With a jump in smartphone shipments, Huawei became the number three player in the global smartphone market in 2013. It shipped a total of 52 million smartphone units in 2013, up from 32 million a year earlier.
“We are satisfied with the past few years and with becoming the number three manufacturer of smartphones, but we want to move to the next stage and bring a new experience for consumers,” he said. “Huawei aims to stand out from the crowd of brands that are competing for number three in the global smartphone market.”
However, he noted that Samsung and Apple are “heroes” in the industry and did not elaborate further on the positioning of Huawei in the global smartphone market. Meanwhile, he hinted that Huawei could become the leader in fourth generation (4G) cellular services with its fast chipsets.
Yang said with the growth of LTE usage, the company’s global LTE smartphone shipments are forecast to grow 67 percent year-on-year from this year to 2017. He also said the proportion of LTE phones in the Chinese smartphone market will grow significantly in 2014, citing data from market research firms Strategy Analytics and Canalys.
“Huawei will continue its LTE innovation and seize strategic opportunities presented by LTE technology,” he said.
To this end, Huawei is investing heavily in R&D. In 2013, the company invested $5 billion, or 12.8 percent of its sales revenue, in R&D. Up to 70,000, or 45 percent, of its employees are engaged in R&D. In addition, it has secured 36,511 patents.
Huawei’s headquarters in Shenzhen
Huawei’s R&D Center at its headquarters in Shenzhen. The rapidly growing company is investing heavily in new technology — it spent $5 billion, or 12.8 percent of its sales revenue on R&D last year and up to 70,000 of its employees are engaged in R&D. / Courtesy of Huawei
Building brand awareness
Because it has mostly been a B2B company, Huawei faces the challenge of building brand awareness among individual consumers. There has been progress, however, as its awareness grew to 52 percent globally in 2013, up from 25 percent in 2012, according to the company. However, its brand awareness comes mainly from the domestic market, so Huawei still has to boost brand familiarity in other parts of the world.
Yang said the company will utilize various platforms including advertising, online and offline retail channels, brand campaigns, digital marketing and sponsorships to achieve this goal. Its objective for this year is to increase brand awareness by 30 percent.