Huawei plans global push to combat its slowing smartphone sales in China

(Reuters) – China’s Huawei Technologies on Friday flagged overall and smartphone revenue figures for 2017 that represented its slowest growth in four years, and vowed to extend its global reach with more premium products next year.

The telecom equipment and smartphone maker expects 2017 revenue to rise 15 percent to 600 billion yuan ($92.08 billion), Chief Executive Ken Hu said in his New Year’s message.

That represents the slowest growth since 2013 for Huawei. Its fast revenue growth in recent years has been slowing as Chinese telecom carriers complete the construction of the world’s largest 4G mobile network and as competition intensifies in the smartphone market.

Hu said Huawei’s smartphone shipments in 2017 totaled 153 million units and its global market share topped 10 percent, cementing its position as the world’s third-largest smartphone maker after Samsung Electronics Co Ltd and Apple Inc.

Huawei said it would focus on profit after posting near-flat annual profit growth in March, weighed down by its fast-growing but thin-margin smartphone business and marketing spending.

Richard Yu, CEO of Huawei’s consumer business group, in a separate New Year’s message said the group will strive to obtain a larger share in the high-end market globally, after recording “significant” growth in markets such as Italy and Germany in the past year.

“In 2018, we will have disruptive products and innovative technology to lead the global market. I believe that 2018 will be the first year that we will truly be walking the road to global prominence,” Yu said.

In October Huawei launched its Mate 10 series, its most expensive model to date and powered with AI-enhanced chips which the company says are faster than Apple’s iPhones. The model “sold extremely well”, Yu said, without disclosing a number.

Yu said the division’s revenue is expected to rise 30 percent to 236 billion yuan – also its slowest growth since 2013.

“We need to better understand the needs of high-end users outside China and fashion-savvy young consumers in China,” Yu said.

Industry tracker IDC forecasts China’s total smartphone shipments in 2017 to shrink slightly versus a year earlier.

Hu also said Huawei’s enterprise business needs to “maintain mid-to-high growth speed and become a pillar business for the company in five years”.

He also called on the company’s consumer business to improve profitability, its new public cloud business to increase in scale, and its core carrier business to outperform the industry.

By Sijia Jiang