Huawei held the 14th annual Huawei Global Analyst Summit (HAS) in Shenzhen from April 11th to April 13th. The theme of this year’s event was “Leading New ICT, the Road to Digital Transformation”. Below are some of the key takeaways from the event:
- Huawei will continue to spend heavily on its R&D going forward. It has consistently invested over 10% of its revenue in R&D every year. This can help Huawei not only to spot technological trends but also to stay ahead of the curve going forward. One such example can be its differentiated competitive Kirin platform with advanced manufacturing supporting heterogeneous computing.
- Huawei’s enterprise business group is likely to deliver robust revenue and profit growth in coming times as it positions itself as an enabler to help operators on their path towards digital transformation especially for operators in emerging markets.
- Huawei’s enterprise business group grew 47.3% YoY in CY2016 with sales revenue reaching CNY 40.7 Billion (US$5.9 billion). Huawei has now partnered with 172 out of fortune 500 and 43 out of Fortune 100 enterprises as their key partner in digital transformation.
- By the end of 2016, Huawei enterprise business group has more than 12,000 global channel partners, over 2,000 service partners and over 400 solution partners across various verticals and segments.
- Huawei’s Consumer business group grew 44% YoY reaching CNY 179.8 billion ($25.9 billion) during 2016 thanks to its growing smartphone business.
- A major part of Huawei’s smartphone target audience is millennials who are spending on an average more than three hours on social media with more than half of them enjoying watching movies and videos on their devices.
- A significant share of Huawei’s success can be attributed to its key partnerships over past years including Leica, Google, Pantone and other supplier partners.
- Huawei is also ramping up its global service centers as it strives to build membership system and innovative service solutions across regions. It has now five global regional service centers in Europe, China, MEA, APAC & USA.
- In past one year Huawei’s offline service center stores increased by 50% in over 50 countries.
- With double digit growth market share in premium segment (>$500), Huawei is likely to build on the momentum through its refreshed P and Mate series which are performing well in China and Europe and already launched in over 30 countries within a short span of over a quarter.
- With brand awareness on the rise, Huawei aims to expand its smartphone business presence in APAC excluding china and MEA region as it increases focus on devices in mid segment which are tailored for such regions. However, Huawei’s strategy for the key country like USA is unlikely to kick off in near term.
- Other challenges for Huawei include to consolidate its position in high end segment and increase revenue opportunities from emerging smartphone markets.
- Apart from this its consumer service portfolio in the consumer business segments is heavily reliable on its home country and it will be challenging for Huawei to scale it beyond china in short term.
- For example, in 2016, the number of Huawei consumer cloud services users reach 210 million worldwide with 198 million alone from China. However, some services like Skytone and Huawei HiApp has the potential to scale beyond China.
- Hence, Huawei need to work closely with leading developers worldwide to scale its services beyond China.
To summarize we believe that Huawei has the momentum across all its key segments to grow in coming years backed by its strong investment in R&D. However, the real success lies in its transformation to a company in an all connected world era where it leverages its strength by seamlessly working across its business segments to enable digitization not just for enterprises but also a seamless connected environment for consumers also.
