Huawei’s smartphone success pushes profits up 43%

Huawei’s smartphone success pushes profits up 43%

Huawei’s global revenue increased by eight per cent in 2013 as it was spurred on by its strong growth in the consumer smartphone sector that now accounts for 23 per cent of the company’s overall revenue.

Related: Huawei prefers organic growth to acquisitions

The world’s third largest smartphone manufacturer saw revenue jump to between CNY238 billion [£24.1 billion] and CNY240 billion [£24.3 billion] in 2013, an increase of eight per cent compared to 2012. It meant operating profit is expected to increase by 43.3 per cent from CNY20 billion [£202 million] last year to between CNY28.6 billion [£288 million] and CNY29.4 billion [£296 million] in 2013.

The company had an internal management reshuffle and reduced operating costs to thank for the impressive operating profit increase as the firm managed to ship 52 million smartphones in 2013 – just shy of its 60 million target.

Huawei also championed its “continued commitment to innovation” illustrated by its ongoing investment in research and development that topped CNY33 billion [£333 million] in 2013 – totalling 14 per cent of the firm’s sales revenue.

Its revenue increase of eight per cent was short of the 10 per cent it has forecast for each of the five years from 2013 and its next stage of expansion is likely to hold the key to future revenue growth.

Huawei is particularly strong in its home market of China and is also enjoying success in Europe but the US is where it ultimately wants to be and analysts have speculated that it needs to take the right approach to the market before going in.

“Huawei in an ideal world would love to be in the US but it’s probably better for them to be seen as eyeing up the market than be seen as begging,” said Duncan Clark, chairman of Beijing-based tech advisory BDA, told Reuters. “They can probably succeed in the US in this world of consumer electronics, where consumers, not carriers, can choose what to buy.”

Related: China’s Huawei continues to work with GCHQ to gain government trust

The US is suspicious of Huawei and warned US companies and government officials to be wary of the firm due to the assertion that the firm would use its entry into the US market to spy on behalf of the US government – something that there is no proof of. 

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