Huawei, the Chinese-based manufacturer making a name for itself in the Android smartphone market, has released a peek at its earnings results for the first half of 2015, despite being a privately-held company. The results suggest Huawei is doing quite well for a company which already ships millions of phones globally on an annual basis, although the company doesn’t just make smartphones — it also has its hand in enterprise with products in cloud computing, data storage, and more, as well as in the carrier business where it offers network technologies for telecommunications operators to easily scale their mobile broadband infrastructure.
During the first six months of 2015, Huawei reports it generated revenue of CNY175.9 billion (~$28 billion USD), an increase of 30% year-over-year from CNY135.8 billion (~$21 billion USD) during the same period a year ago. Operating margin for the six months was 18%, down from 19% during the year ago period.
“In the first half of 2015, Huawei achieved stable and healthy growth in all of its three business segments,” said Huawei’s Chief Financial Officer (CFO) Meng Wanzhou. The rest of the statements made by Huawei’s CFO include a lot of buzzwords and phrases common in press releases like this one, but in regards to its smartphone business the company attributes its positive growth to its “well-received” Ascend Mate 7 and P8 Android phones, both providing a “superior experience” which solidify the Chinese company as a solid player in the mid-range and high-end markets:
Huawei’s mid-range and high-end smartphones, Mate7 and P8 in particular, as well as Honor-branded phones, have made solid progress, helping us guarantee quality and sustainable growth in the consumer business.
What’s arguably more interesting is a report out from Reuters, also released today, which claims that Huawei is on track to hit 100 million smartphones shipped by the end of the year. That’s according to an internal memo the website was able to review, at least, and if true it would be a hefty jump from the 75 million units the company reported shipping last year. Reuters goes on:
Shenzhen-based Huawei has recorded monthly global smartphone shipments of more than 10 million every month since May, the head of the company’s consumer business, Richard Yu, wrote to staff in a memo sent on Monday.
Huawei shipped 75 million smartphones in 2014, below its original sales target of 80 million.
It’s worth noting the distinction between products shipped and products sold, and while I believe Huawei is likely scaling up its manufacturing intelligently with demand (and sells lots of off-branded, low-end devices), there’s still a difference. When a company reports how many units of anything it has shipped, that’s not a measure of how many were actually purchased by customers – it’s a measure of how many units were sent to store and warehouse shelves to be made available for purchase.
In a recent post I reported that Apple in the first three months of 2015 was responsible for 72% of all smartphones sold in China for the period, and it threw off some individuals because at face-value it seemed like Android was still far more dominate: Apple shipped far less devices to China than did all Android manufacturers combined – ~14 million units compared to ~80 million Android phones. But while Apple shipped far fewer phones to Chinese retailers, the amount of iPhones that got traded for legal tender by consumers was far higher than any Android manufacturer or even the Android ecosystem at a whole was able to achieve. Just something worth noting, especially with other smartphone manufacturers as of late like HTC and Amazon writing down, or marking as a loss, thousands of smartphones left sitting on shelves, unsold, but still technically shipped. Until Huawei releases hard sales numbers, or more detailed financials, we can only guess at how many newer mid-range and high-end phones they’ve sold.
Huawei has continued its uphill battle to become a recognized brand in the United States, most recently by beginning to sell its mid-range P8 Lite stateside, and also by releasing a short bit to YouTube demonstrating to English-speaking consumers how exactly to pronounce its name. The company pulled back from the US market in 2013 after continued allegations of running state-sponsored hacking and intelligence gathering on the country’s citizens using devices it sold to customers in that market. No tangible evidence was ever brought forward that could lead anyone to believe the company was actually engaging in such acts, though, and the company in May held a press event to present its new strategy for tackling the US market during which it announced that aforementioned US launch of the P8 Lite.