Switch to high end and mid tier device three years ago bringing financial success
Thanks to its recent strategy change to focus on premier and mid tier smartphones, Huawei has announced significant growth in its handset business’ global sales for the first half of 2015. Also, smartphone sales for Huawei in its home territory of China have more than doubled, as the company rises above a worldwide slowdown in mobile shipments.
Huawei Consumer Business Group (BG) shipped a total of 48.2 million smartphones between January and June this year, an increase of 39% compared to the same quarter last year. This is compared to Gfk figures that show global smartphone demand recorded just 7% growth in the same period, which was down significantly from over 19% year on year in the fourth quarter 2014. Gfk attributed this slowdown to a decline over the last 12 months in demand for smartphones in China and Developed Asia, down -14% and -5%, respectively.
Unaffected by the drop in demand for smartphones however, Huawei’s handset business recorded revenue of $7.23 billion in the first half of 2015, a year on year increase of 87%. The company stated this was due to the success of Huawei Consumer BG’s new strategy of focusing on mid to high end handsets, which contributed to both the increase in shipments and average selling price, as opposed to its former strategy of smartphones for the masses and entry level devices.
Richard Yu, CEO of Huawei Consumer BG, commented: “This incredible growth is a testament to our core business strategy to offer premium quality products, raising our expected revenue for 2015 from $16 billion to $20 billion.” He added: …Huawei is set to become one of the key players in the long run.”
Shipments for Huawei’s mid to high end devices recorded a year on year increase of 70%, representing 31% of its total handset shipment and 42.9% of total revenue. The revenue from the mid to high end category increased 388% while the profit from this category represented 44% of the unit’s total profit in the period.
In the first half of this year, Huawei’s flagship smartphone, the Mate7, shipped a global total of five million units, while the Huawei P7 recorded accumulative sales of seven million units. Over one million units of Huawei P8 have been sold in the first two months since launch.
In China, Huawei experienced impressive growth with a revenue surge in the first half of the year of 124% year on year. According to research firm Gfk, Huawei beat Samsung and Apple to achieve the largest marketshare in the Chinese market, recording share of 12.9%, 13.6%, 14.1% and 15.2% in March, April, May and June respectively.
Meanwhile Western Europe, Northeast Europe, South Pacific, North Africa and Middle East regions recorded 45%, 54%, 41%, 164% and 48% year on year growth respectively.
Additionally, Huawei’s high end smartphone shipment to Italy and Spain achieved high year-on-year growth of 293% and 44 % each; Gfk stated that Huawei held 24% and 20% of market share in Spain and Italy respectively.
Huawei Consumer BG recorded continued year on year business growth revenue reaching $9.09 billion, a year on year increase of 69%. The unit’s revenue represented 32% of the total revenue of parent company Huawei Technologies, up from 24% in the same period last year.
On Monday Huawei reported its best sales growth in five years after the Chinese equipment manufacturer said revenue increased by 30% year on year to reach $28.3 billion for the first six months of this year.