Huawei Technologies to Achieve Target of 140 Million Smartphones by the End of 2016

The Chinese smartphone giant is poised to become the world's largest smartphone maker.

Huawei Technologies to Achieve Target of 140 Million Smartphones by the End of 2016

By: Abdullah Saeed Qureshi Published:
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The Chinese smartphone giant is poised to become the world's largest smartphone maker

Huawei Consumer Business Group said on Tuesday that the company is set to achieve the target of more than 140 million smartphones by the end of 2016, after a solid first half business results saw the Chinese smartphone giant reporting a 40% surge in revenue.

In a latest earnings presentation, Officer Richard Yu, Huawei’s CEO Consumer Business Group, indicated that his business segment is looking to target about $28 billion in revenue by year end, 41% more than what it achieved last year. Last year, Huawei’s consumer business group revenue stood at $19.9 billion. Mr. Yu also highlighted that the company aims to set up 15,000 new retail stores this year throughout the world. Currently, Huawei has 35,000 retail stores worldwide.

According to the expanded data released on Tuesday, Huawei said its smartphones shipments for the first six months of 2016 stood at 60.56 million, representing an increase of 25% compared year-over-year (YoY). Revenue for the Consumer Business Group, which is mainly involved in selling smartphones, stood at $11.59 billion (77.4 billion yuan), representing a 41% YoY surge.

Mr. Yu said: “We saw particularly fast growth in traditionally high-end smartphone markets such as Europe and emerging markets including North Africa, Central Asia & Latin America.” He also said that this performance is the demonstration of Huawei's deep commitment to advancement, foresight of buyer pattern and dual strategy of concentrating on both home and global markets.

He added: “Looking to the future, we will continue to work with our industry partners to offer consumers excellent levels of service and develop innovative new products that combine technology, quality and style.”

According to the data released by the International Data Corporation (IDC), the overall global smartphone shipments in the first half of the year grew 3.1%, depicting that the Chinese smartphone maker has outperformed the market. According to the previous data by IDC, Huawei is currently the world’s third largest smartphone maker after Apple and Samsung.

According to a research firm, GFK, the company’s smartphone share outside the mainland territory surged to 11.4%. Similarly, growth in foreign markets was 1.6 times faster than that of China. In some European countries, the company was able to extend its share to more than 15%. GFK highlighted that Huawei’s performance in the high-end markets, including France, the UK, and Germany, also shined in the first half of the year. In mainland China, the company stood out as the market leader with over 18% of the market, said GFK. This in itself is a huge investment for the company, as the Chinese market once dominated by the foreign smartphone makers such as Samsung and Apple has finally seen a homegrown firm taking over from them.

The company said: “In key countries from North Africa and South Pacific, Huawei have gained some breakthroughs on market share. In Egypt, Huawei’s smartphone market share has reached over 20% and in New Zealand, Huawei’s share has reached over 15%.”

The company further stated that its high-end smartphones played a vital role in producing significant sales growth. Its flagship products including Mate 8, Honor V8, P9, MateBook, and others have been well received by customers across the globe. Mate 8 shipments rose about 65% during the period while its P9 and P9 Plus smartphones sales also saw significant growth, resulting in about 4.5 million units sold during the first half. Sales of P9 and P9 Plus jumped about 120% globally. In addition, the company said that its newly launched MateBook, Huawei’s first 2-in-1 notebook product, has also been made available in more than a dozen countries, including the US.

Huawei said that it will invest more in Research and Development (R&D) to come up with new, innovative products. The company also promised to remain customer-centric and stick to its pipeline strategy. Huawei’s CFO Sabrina Meng said: “Huawei will continue to work with its customers and partners to maximize the value of new developments and technologies, and to build a better connected world.”

In January 2016, CBN reported that Huawei has effectively settled 16 R&D offices, which gives it a leading edge over most smartphones sellers, as most of them rely on upon third-party dealers for components. Through broad R&D, the organization is quick to produce its own particular tools and develop smartphones in line with the customers’ preferences.

Last year, Huawei shipped more than 100 million smartphones to become the first ever Chinese company to pass the milestone. Similarly, the number one Chinese smartphone maker has ramped up its shipments to 100 million from three million in the past five years, representing a 33% increase, according to the data released by IDC.

According to Mr. Yu, the company received significant success in such a short span of time, which is a milestone. He further highlighted that the company’s elegant, effective, and refine brand strategy has played a significant role in enhancing its overall sales. Huawei is keen to gain customer trust through an effective brand awareness campaign and is also committed to provide its users with a unique and ultimate experience.

The Chinese smartphone giant has also said that it’s working with Alphabet Inc (NASDAQ:GOOGL), to launch a “highly efficient (Android smartphone), Nexus 6P. “Mr. Yu also said that the product has received very good customer feedback.

Huawei is one the very few smartphone sellers that have been able to perform despite an overall slump in the global smartphone market. China, which is currently the world’s largest smartphone market, is experiencing a major slowdown in its economy, which has affected sales of most leading smartphone vendors, including Apple and Samsung.

Apart from the Western smartphone giants, local smartphone vendors including Xiaomi and Lenovo also faced significant downturn in growth amid the slowdown in the mainland territory. Xiaomi, as a result, also had to reduce its smartphones shipment target by 10%.

However, the Chinese company has made swift progress and we believe that it is likely to maintain its growth momentum despite uncertainties surrounding the smartphone market. Even industry experts have favored Huawei to lead the global smartphone market, beating the likes of Samsung and Apple.