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Huawei aims to be on par with Apple

By Gao Yuan (China Daily) Updated: 2016-01-15 08:24

Huawei aims to be on par with Apple

The stand of Huawei Technologies Co Ltd at an industry expo in Wuzhen, Zhejiang province. ZHU XINGXIN/CHINA DAILY 

Huawei Technologies Co Ltd, the world's largest telecom equipment maker, is looking to grow its annual sales of consumer electronics to $100 billion within five years, according to founder Ren Zhengfei.

He revealed the target to staff on Wednesday evening, and said the firm is planning to introduce more high-end devices to lift revenue.

He said its smartphone unit is likely to dominate sales in the future, but that sales of wearables and electronic accessories would also continue to be big earners.

Huawei has already said its smartphone business generated $20 billion in revenue in 2015, a 70 percent growth from previous year, and to achieve the new target the firm will have to record at least 30 percent annually over the next five years.

Nicole Peng, a director at industry consultancy Canalys China, called Ren's projection "an ambitious target".

"But it is understandable for Huawei to announce this because it has been trying to build a profitable smartphone business on par with Apple Inc and Samsung Electronics Co Ltd," she said.

Apple generated $155 billion in iPhone sales globally in the fiscal year that ended in September.

Gene Cao, an analyst at Forrester Research Inc, was equally pessimistic about Ren's five-year target.

"Five years is too far to predict in the smartphone market and Huawei may face strong challenges in the long run," he said.

Beijing-based vendor Xiaomi Corp is also in a fierce tussle with Huawei for the top spot in China's smartphone market.

Both analysts suggested that to hit those numbers, Huawei will have to seriously shift its focus to overseas markets as growth in China slows.

"It still has great opportunities in the Middle East and African markets, for instance, this year and next," Cao said.

Huawei has said it ultimately plans to sell devices in more than 170 markets outside China by leveraging the company's abundant intellectual property rights.

Peng from Canalys said as the world's largest telecom equipment maker, Huawei's rich bank of intellectual property and its relationship with local carriers offer the company huge potential to reach out to more high-end markets.

More than 70 percent of Huawei handsets were sold in China during the third quarter of last year, according to Canalys, but it shipped just 2 percent of its devices to the United States, which has a far-higher proportion of high-end buyers.

"Huawei has to conquer the US if it wants to reach its goal," said Peng.

Late last year, Huawei partnered with Google Inc to introduce the premium Nexus 6P device to the US, in a signal that the Chinese giant was ready to ramp up its presence in the market.

Huawei was the world's third-largest handset vendor by the third quarter of 2015, shipping more than 26 million devices, a 60.9 percent year-on-year increase, according to data from another research firm International Data Corporation.

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