Business / Technology

Huawei plans to beef up its R&D

(China Daily) Updated: 2016-07-26 07:49

Huawei plans to beef up its R&D

The Huawei P9 global launch at Battersea Evolution in London. [Photo/Xinhua]

Huawei Technologies Co's revenue growth accelerated in the first half of the year as upgraded smartphones and network gear helped China's largest vendor of telecommunications equipment counter deteriorating global demand.

The world's third-largest smartphone brand grew revenue 40 percent to 245.5 billion yuan ($37 billion) in the first six months, the Shenzhen-based company said in a statement. That's up from the 30 percent growth it managed in the first half of 2015.

Founded in 1987 by Ren Zhengfei, Huawei has sprung to the vanguard of a crop of Chinese smartphone vendors trying to compete with global leaders Samsung Electronics Co and Apple Inc.

The company used its business of selling networking gear to bankroll an expansion into premium phones, becoming China's biggest mobile label last year.

Huawei plans to beef up its R&D

Huawei P9 smartphone models are seen during the phone's launch ceremony in the Sri Lankan capital Colombo on June 24, 2016. [Photo/VCG]

"We are confident that Huawei will maintain its current momentum, and round out the full year in a positive financial position backed by sound ongoing operations," Chief Financial Officer Sabrina Meng said.

Competition, however, is weighing on profitability. Huawei's operating margin came to 12 percent in the first half, narrowing from 18 percent in the same period last year.

Huawei didn't break out the performance of individual units of a business that also encompasses cloud computing and enterprise services. Its Consumer Business Group, which sells phones, watches and laptops, is scheduled to announce results on Tuesday.

That unit chalked up 73 percent sales growth in 2015 to 129.1 billion yuan, out of the corporation's total revenue of about 395 billion yuan. Richard Yu, chief executive of the consumer business group, has said the company aims to eventually displace Apple and Samsung from the top spots in global smartphones.

Xiang Ligang, a telecom veteran and CEO of the industry website, said despite a string of patent disputes with Samsung Electronics Co Ltd, Huawei's smartphone business is growing quite robustly, which will give the Shenzhen-based company a good boost in its year-end financial performance.


Ma Si contributed to this story.

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