There are over five hundred analysts and media worldwide attending Huawei's 12th Global Analyst Summit in Shenzhen, China, today. Our analysts from our Wireless Smartphone Strategies (WSS) service also joined the event.
The key theme of Day One is about the corporate overall performance review and strategy outlook. Looking in the rearview mirror, 2014 was a banner year for Huawei. Financially, company overall-revenue increased +21% YoY to RMB 288.1 billion (US$46 billion). Company overall-profitability also improved, with 9.7% net profit in 2014, up from 8.8% in 2013, mainly thanks to a streamlined organization and management structure, as well as improved average selling prices (ASP).
The operator business still made up the lion’s share (67%) of overall group revenue, but consumer (26%) and enterprise (7%) divisions have been growing faster in 2014. The consumer business group (smartphone, dongles, and other products) posted RMB 75.1 billion (US$12 billion) revenue in 2014, up 33% YoY, leading the pack among all three business groups.
Geographically, China contributed to 38% of total revenue in 2014, up from 35% in 2013, mainly thanks to the uptake of 4G LTE in China. Europe, Africa, Middle East, Asia Pacific and Latin America also saw healthy growth. In contrast, its North America performance remains lackluster and saw a decline last year.
For the smartphone business, in which Huawei ranked the third largest smartphone vendor by volume worldwide in 2014, according to a report from our Wireless Smartphone Strategies (WSS) service, Huawei reiterated its commitment to the sector but indicated it will continue focus on profit rather than scale. Compared with the two industry giants Apple and Samsung, the operating margin on Huawei's smartphone business is still quite slim, so there is scope for growth. Our Wireless Smartphone Strategies (WSS) service tracks the world's top-16 smartphone vendors by value and profitability on a quarterly basis in this extensive report.
Moreover, Huawei outlined some initiatives to upgrade the service-driven platform for its smartphone products, including building up offline-service networks, building a full-service online platform in key cities across 100+ countries, as well as establishing an operational excellence center (OEC) to realize synergy across online and offline channels. We look forward to more details in the Day Two session tomorrow.
Connection is the keyword for this event. “Open road to a better connected world” is their slogan and can be seen everywhere at this event. We understand it refers to the connection between Huawei and customers, between consumers and service / product providers, between people and people, and between IoTs, etc. In the Consumer business, will Huawei extend into a more cross-product connected ecosystem, from its current smartphone and dongle-focused product lineup? How will Huawei execute its service-driven platform to provide consumers with full-lifecycle services? Please stay tuned for our Day Two blog.