The Five-year Target Is $70 Billion For Huawei's Needle-like Survival

- Aug 28, 2018-

According to the 2013 annual report released by huawei investment holdings co., LTD. (hereinafter referred to as huawei) on the same day, the annual sales revenue of the company was 239 billion yuan, up 8.5% year on year, audited by accounting firm KPMG.Net profit was 21 billion yuan, up 34.4 percent year-on-year.In dollar terms, huawei's sales revenue and net income rose 11.6 per cent ($39.5bn) and 38.2 per cent ($3.47bn) last year.

Last year, huawei's smartphone shipments made the top three in the world.Business income growth is over 30%;Its system equipment covers up to 110 LTE networks.Huawei has said it will maintain an average 10 per cent growth over the next five years to reach its target of growing sales to $70bn by 2018.

However, in the face of good times, huawei CEO ren zhengfei still stressed that huawei is just a limited company.

"We can only lead American companies in areas where the needle is big, and if we were to expand to the size of a match head or a small stick, we would never achieve that."In his speech to the chief executive of huawei's annual report, ren said the company must focus on its future and have the "turtle spirit" of unremitting efforts, while the slogan can only lead to management waste.

"Don't be such an Internet freak."

"" to prevent blind innovation, innovation is shouted in all directions, which is our funeral song." "According to ren, blind innovation diverges the company's investment and power, while huawei focuses on the "pipeline".

Faced with the clamorous Internet thinking, ren stressed that the success of the Internet should not be impetuous, "do not be so Internet impulse, we are also Internet companies, is for the Internet to transfer data traffic pipeline iron", and the future will be able to do so for Pacific Ocean pipeline iron companies will be less and less.

Xu zhijun, huawei's rotating CEO, told 21st century business herald in an interview after the 2013 earnings release that the pipeline strategy is huawei's core strategy, and that huawei aims to be a "digital logistics enabler".

As of 2013, huawei's equipment served one-third of the world's connectivity, and the future of fully connected digital logistics systems will require bigger, thicker and faster pipelines, which is a strategic opportunity for huawei, according to xu.

The development of huawei's three existing business clusters will also be based on its focus on pipeline strategy.

Among them, the network business of operators achieved sales revenue of 166.5 billion yuan last year, accounting for 70% of huawei's total revenue. However, due to the moderating factor of capital expenditure of global operators, the growth rate of this part of business is the lowest among the three BG(business group), which only increased by 4.0% year on year.

Straight army xu told reporters that huawei carrier network business, continued to help operators to build network at the same time, will help operators achieve to the transfer of the Internet, together with the operator for terminal customers, including building the mobile Internet platform, and cloud services platform, and help operators set up the operation support system based on Internet architecture.According to huawei's internal plan, the business group is expected to grow 8% in 2014.

The focus of enterprise business can be summarized as "integrated" strategy.Xu said huawei's enterprise business is positioned as a product provider, while sales and delivery are through the development of partners.Last year, huawei's enterprise business generated sales revenue of 15.2 billion yuan, up 32.4 percent from a year earlier and accounting for 6 percent of total revenue.

Meng wanzhou, chief financial officer of huawei, admitted in an interview with reporters that huawei's enterprise business is still in the investment stage and has yet to turn a profit.However, xu stressed that the market potential of enterprise business is huge, but there has been no good solution before, and huawei has developed into a differentiated competitive force in some vertical markets, including agile network, data center and eLTE.

Huawei, for example, pioneered agile networks last year, offering to use SDN in corporate networks and the industry's first commercial 400G router, xu said.

As the only B2C business group of huawei, BG is directly oriented to consumers. In the past, it has been producing and selling through the channels of operators. As a result, "products are unlicensed".

Huawei's strategy is to strengthen its brand and expand e-commerce and social sales on the basis of traditional operators' channels.Last year, huawei attracted wide attention in the industry by launching P6 phones worldwide in London, UK, and setting a target of selling 10 million units per model.

Mr Xu said the strategy for BG, the consumer business, this year was to continue to strengthen its brand and move towards the mid-to-high end of the market.

"You'd better ask yu chengdong [head of huawei consumer BG], and he'll think I'm criticizing him."This implies that the multimillion sales plan has not been completed.

But Mr Xu stressed that last year the P6 "" achieved a win-win brand profit" "and will release its next generation version in due course this year.

In 2013, huawei's consumer business generated sales revenue of rmb57bn, up 17.8 per cent from a year earlier, according to the company's results.Xu told reporters that the part of the business is expected to grow by 15-20 percent in 2014.