Latest Financial news of Huawei

SMARTPHONES: Gionee Treads Water as China Smartphone Sales Plunge

By newsdoug on April 9, 2018

Bottom line: Skidding sales in China’s oversaturated smartphone market are long overdue, and could claim Gionee as a first major victim by year-end.

The inevitable is finally happening, and China is showing signs of smartphone burnout. The latest government data is showing that first-quarter smartphone sales in China plunged 26 percent, which is one of the largest drops I can ever recall. In this case we can’t really blamed the usual seasonal effect, since this is a quarterly number that includes both January and February — the two months when Lunar New Year falls.

At the same time, separate reports are citing a top executive at second-tier smartphone maker Gionee shooting down rumors that his company may not pay some of its suppliers due to funding shortages. This comes just weeks after the company made mass layoffs at a major production facility in the southern city of Dongguan, and is one of the stronger signals of distress I’ve seen from China’s bumper crop of second-tier smartphone makers. Read Full Post…

TELECOMS: Huawei Feasts on China Market

By newsdoug on April 2, 2018

Bottom line: Huawei’s strong revenue and profit growth for 2017 are coming largely on the back of its home China market, which should continue to boost the company as Beijing aggressively pushes upcoming 5G services.

Huawei finds land of plenty in hometown market

Telecoms giant Huawei is in the headlines as the new week begins, with word that the company has rekindled its profit growth in its latest reporting year. Unlike other companies, Huawei isn’t publicly traded and thus isn’t required to release any financials, which always means we need to take their numbers with a slight grain of salt. But generally speaking the company does seem to be trying to report meaningful figures, at least based on past years when the results weren’t all that flattering.

This time around the results look good, at least the final ones for revenue and profit growth. But a closer look shows something that many of us know, namely that the company is heavily dependent on its home market for that relatively strong showing. Some of that is probably deserved, as Huawei has emerged as a maker of quality products for both its core networking equipment and also its newer smartphones, which count myself as one of their fans and owners. Read Full Post…

SMARTPHONES: Xiaomi Wins India, Makes First Visit to Top Trade Show

By newsdoug on February 21, 2018

Bottom line: Xiaomi’s taking of the India smartphone crown and attendance at a major trade show next week are aimed at boosting its profile in the run-up to its IPO.

Hype is building in the run-up to what’s likely to be one of the largest high-tech IPOs this year, with word that smartphone maker Xiaomi has snatched the India crown from a fading Samsung (Seoul: 005930) and is also making its first visit to the world’s top telecoms trade show next week. Both events are important milestones for a resurgent Xiaomi, as it attempts to boost its profile for a public listing that’s likely to raise in the neighborhood of $10 billion in Hong Kong.

At the same time, the list of attendees for this year’s Mobile World Congress taking place next week in Spain is also notable for a number of brands that have purchased booths in the past but aren’t doing so this year. Leading that list is Oppo, which briefly took the China smartphone crown last year from current leader Huawei. Also absent from the list are past attendees including Meizu and Gionee. That probably speaks to the fact that some of these brands are feeling the squeeze of prolonged competition in the space, and are choosing to spend their limited marketing budgets elsewhere. Read Full Post…

TELECOMS: Spurned by US, Huawei Turns to UK

By newsdoug on February 7, 2018

Bottom line: Huawei’s latest big financial commitment to the UK is mostly for show, but Britain could still emerge as a winner over the longer term if Huawei conducts more R&D work in its British labs.

After getting the cold shoulder from the US for its smartphones, telecoms superstar Huawei is turning increasingly to Europe, and specifically to Britain, for consolation. That’s the key takeaway from the latest reports that say Huawei has told British Prime Minister Theresa May that it will spend a further 3 billion pounds ($4.2 billion) on procurement from the UK on top of its other commitments to the country. (English article)

This particular move seems mostly political, and also it’s questionable how significant it is. Huawei made its commitment last week during a trip by Theresa May to China, and this kind of mega-commitment is quite common during these meetings between Chinese and global leaders. The fact of the matter is that Huawei posted 600 billion yuan ($97 billion) in sales last year, meaning it had to spend perhaps half of that amount, or around $50 billion, on procurement of various components for its core networking equipment and smartphones. Read Full Post…

SMARTPHONES: Dumped by AT&T, Huawei Enters US with Supermodel

By newsdoug on January 12, 2018

Bottom line: Huawei’s decision to go ahead with a US market entry for its latest high-end phone, despite collapse of a tie-up with AT&T, is likely to produce very limited results due to lack of a carrier partner.

If you can’t get a serious business partner, at least get a pretty face. That seems to be the message coming from a frustrated Huawei, which has announced it has signed on “Wonder Woman” star and model Gal Gadot as chief experience officer as it prepares to enter the US. This somewhat frivolous move was most likely part of a bigger announcement the company hoped to make for a grander entry to the US in partnership with corporate partner AT&T (NYSE: T).

But as many market watchers may already know, the AT&T deal reportedly collapsed at the last moment for unexplained reasons. The new tie-ups were all set to be unveiled at the Consumer Electronics Show (CES) taking place this week in Las Vegas. While the show went on and Huawei announced plans to release a version of its high-end Mate 10 in the US, with Gadot as product spokeswoman, the AT&T announcement never came. Read Full Post…

SMARTPHONES: Apple Finds Its China Mojo as Xioami Moves Up

By newsdoug on November 3, 2017

Bottom line: Apple should be able to extend its return to growth in China into at least one more quarter, while Xiaomi should also be able to continue posting strong double-digit growth for the next year.

Apple (Nasdaq: AAPL) has just released its latest quarterly results that show China is back on a growth track, quieting skeptics who had said its latest iPhone was debuting to mostly snoozes in the world’s largest smartphone market. On a broader basis, IDC has also just announced its global figures for third-quarter smartphone sales, showing Huawei continues to creep up on Apple and could well take the global No. 2 spot from its U.S. rival over the next year if current trends continue.

Last but not least is China’s own Xiaomi, which is catching people’s attention again with the strongest growth of any global players in the third quarter, consolidating its position as the world’s fifth largest player. It’s probably too early to say that Xiaomi’s comeback story has legs. But the company is the only one posting triple-digit growth among the top 5 in the latest quarterly results, a distinction previously reserved for Huawei and Chinese rival Oppo. Read Full Post…

SMARTPHONES: Huawei Unseats Apple, Eyes the Cloud

By newsdoug on September 11, 2017

Bottom line: Huawei could overtake Apple as the world’s second largest smartphone seller in the next 1-2 years, while it could also pose a challenge in global cloud services over the next 5 years.

We’ll begin the new week with a couple of items from Huawei that show how the company that began as a telecoms network builder looks set to unseat fading PC giant Lenovo (HKEx: 992) as China’s global leader in consumer tech. The first of those has one research house releasing data that show Huawei’s smartphones surpassed Apple (Nasdaq: AAPL) for two consecutive months in June and July to become the world’s second largest brand. The second has a Huawei executive discussing his plans for the company’s cloud computing services, saying he wants to become a global top 5 player.

The first headline shows that Huawei is not a company to be taken lightly, which means that people should pay close attention to the second headline. In my years of covering Huawei, the company has proven to be quite focused and determined, and pours large amounts of money into product development to make sure it can meet its goals. It focused its early efforts on building traditional telecoms networks, but more recently has moved to enterprise networks and consumer devices like smartphones and notebook computer. Read Full Post…

SMARTPHONES: Smartisan Gets New Funding, But From Where?

By newsdoug on August 7, 2017

Bottom line: Smartisan’s new funding and plans to produce 5-6 smartphones a year look like an anomaly in the highly competitive market, and it’s unlikely to survive as a standalone entity over the next 5 years.

I was a bit surprised to read that a clear second-tier smartphone player, the uppity Smartisan, has received 100 million yuan ($147 million) in new funding, as we begin the latest week of summer. I haven’t seen this company’s name or many second-tier players like OnePlus in more than half a year, though their collective names have come up quite a bit in the bigger smartphone numbers.

That’s a reference to the “other” category in the quarterly smartphone figures put out by data tracking firms like IDC, which show that this collective group that includes all names lumped together after the top 5 is rapidly losing share. In IDC’s latest China market data that came out last week, the top 5 vendors, Huawei, Oppo, Vivo, Xiaomi and Apple (Nasdaq: AAPL), collectively controlled 73 percent of the market. “Others”, including the likes of Smartisan, had to divvy up the remaining 26.9 percent. But what was most notably was that 26.9 percent marked a sharp decline from last year, when this group controlled 36.2 percent. Read Full Post…

SMARTPHONES: Xiaomi Comeback Marches On, But Will It Last?

By newsdoug on July 27, 2017

Bottom line: Xiaomi’s rising market share and securing of $1 billion in new financing underscore its nascent turnaround may have some legs, even as its position remains tenuous in the cutthroat market.

Former smartphone sensation Xiaomi is in several headlines as we head into the close of the week, all of which seem to underscore that its nascent rebound may have some legs. But as anyone in the industry will tell you, any smartphone maker is really only as good as its last model these days, meaning fortunes can quickly turn with just one misstep. The smartphone sphere is littered with such examples of such missteps that ultimately led to corporate downfalls, including Samsung (Seoul: 005930), as well as former giants Nokia (Helsinki: NOK1V) and Motorola.

That said, Xiaomi is a slightly different case from that trio, since its initial rise to fame was really almost exclusively based on hype and savvy marketing rather than any cutting-edge product. The company is trying to correct that problem now by improving its product lineup, including the unveiling of its latest phone and upgrades to its own operating system. At the same time, media are reporting the company has received a new $1 billion loan, meaning banks still have some confidence in the firm, even if investors are skeptical. Read Full Post…

TELECOMS: Huawei in US Hot Seat Over Iran Sales?

By newsdoug on April 13, 2017

Bottom line: Huawei is likely to be found guilty of selling products to Iran in violation of US sanctions, and could be fined up to $2 billion but won’t face additional punishment.

Huawei being probed for Iran violations?

When word first emerged four years ago that telecoms equipment maker ZTE (HKEx: 763; Shenzhen: 000063) was being investigated for selling American equipment to Iran in violation of US sanctions, other reports also indicated that crosstown rival Huawei was also being probed over the same matter. Huawei’s name later disappeared from the headlines, though it was never really clear if the company had been cleared of suspicion in the matter. Now it appears the company may still be under investigation, meaning it could potentially be slapped with a fine even bigger than the nearly $1 billion levied on ZTE. Read Full Post…

SMARTPHONES: Oppo Shows India Resolve with Cricket Deal

By newsdoug on March 13, 2017

Bottom line: Oppo’s major new cricket sponsorship deal shows its commitment to India, but may have to be renegotiated if and when the company’s fortunes decline in the next 1-2 years following its meteoric rise.

Smartphone high-flyer Oppo is trying to show the world it’s serious about India, with word it will pay 1.1 billion yuan ($160 million) for rights to sponsor the nation’s national cricket team. News of the deal comes just three months after China’s top smartphone brand announced plans to build a production facility in the hotly contested India market, which has become a magnet for Chinese brands over the last year.

All that raises the question of whether Oppo is for real, or just another passing fad in China’s constantly changing smartphone landscape. That landscape has seen players like Lenovo (HKEx: 992), Xiaomi and Huawei become dominant players in the world’s largest smartphone market one day, only to rapidly fade the next. It’s obviously still too early to say if Oppo will follow in that trajectory, though my educated guess would be the answer to that question is quite possibly “yes”. Read Full Post…