Huawei attributes growth in H1 smartphone sales to strategy change

Chinese equipment manufacturer Huawei reported strong growth in global mobile phone shipments and revenue in the first half of 2015, with smartphone revenue in China more than doubling from the year-ago level.

In the first six months, Huawei Consumer Business Group (BG) shipped a total of 48.2 million smartphones, representing a year-on-year increase of 39 per cent. According to research company GfK, this compared with 7 per cent growth on a global basis, down from 19 per cent year on year in the fourth quarter of 2014. The growth also puts it on course to sell 100 million mobile phones this year, Reuters said.

The strong shipment growth drove up revenue from the handset business by 87 per cent year on year to $7.23 billion (€6.6 billion) in the first half. The company attributed this growth to its 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 selling mass-market, entry-level devices. Total revenue in Huawei Consumer BG increased by 69 per cent to $9.09 billion.

Indeed, shipments of Huawei's higher-priced devices recorded a year-on-year increase of 70 per cent, representing 31 per cent of its total handset shipment and 42.9 per cent of total revenue. Revenue from this category increased 388 per cent while profits represented 44 per cent of the unit's total profit in the period.

Richard Yu, CEO of Huawei Consumer BG, said the strong growth is "testament to our core business strategy to offer premium quality products, raising our expected revenue for 2015 from $16 billion to $20 billion."

In its home territory of China, Huawei saw revenue increase by 124 per cent year-on-year in the first half of the year. According to GfK, Huawei beat Samsung and Apple to achieve the largest market share in the Chinese market, recording share of 12.9 per cent, 13.6 per cent, 14.1 per cent and 15.2 per cent in March, April, May and June respectively.

Meanwhile revenue growth in Western Europe, Northeast Europe, South Pacific, North Africa and Middle East regions reached 45 per cent, 54 per cent, 41 per cent, 164 per cent and 48 per cent year-on-year respectively.

In the first-half period, Huawei Consumer BG represented 32 per cent of the total revenue of parent company Huawei Technologies, up from 24 per cent in the same period last year. On Monday Huawei also reported its best sales growth in five years after revenue increased by 30 per cent year-on-year to reach CNY175.9 billion (€26 billion/$28.3 billion) for the first six months of this year.

For more:
- see this release from Gfk
- see this article from Reuters
-
see this Huawei release

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