Huawei's smartphone revenue doubles

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Huaweis smartphone revenue doubles
(FILES) This March 27, 2014 file photo shows the Microsoft logo in San Francisco, California. Microsoft announced a net loss of $3.19 billion in the past quarter July 21, 2015, blaming a hefty writedown on the smartphone business it acquired from Nokia. The US tech giant earlier this month announced a $7.5 billion charge to write down the value of the smartphone operations acquired last year from the Finnish group. AFP PHOTO/JOSH EDELSON /FILES

Published: Wed 22 Jul 2015, 2:19 PM

Last updated: Thu 23 Jul 2015, 12:59 PM

Huawei Technologies Co Ltd more than doubled its China smartphone revenue in the first half of 2015, defying a slowdown in the world's biggest handset market that is enveloping rivals Xiaomi Inc and Samsung Electronics Co Ltd.
The fourth-largest smartphone maker globally missed shipment targets for two years, but a focus shift to high-margin premium models pushed January-June worldwide shipments to 48.2 million phones, Huawei said on Wednesday.
That puts it on course to move 100 million mobiles this year, 33 per cent more than last.
The turnaround comes almost three years after Shenzhen-based Huawei decided to shed its budget appeal and challenge Samsung and Apple Inc at the high-end of the market, where analysts said an increasing number of previously price-conscious Chinese consumers are willing to spend their money.
In contrast to Huawei, overall smartphone shipments in China shrank for the first time in six years in the first quarter, and one-time leader Xiaomi booked its first fall in sequential semi-annual sales, saying the domestic market is nearing saturation.
"There's that buzz going around Huawei in China right now and it's being increasingly associated with better product quality," said Bryan Ma, researcher IDC's Asia-Pacific vice president. "It's quite dramatic how successful they've been."
Behind that success is convincing Chinese consumers that it is worth paying more for its feature-packed yet moderately priced devices, Ma said. Its first-quarter average selling price jumped to $222 from $128 a year earlier, he said.
Huawei's consumer business group, which includes its smartphone division, booked global revenue of $9.09 billion for the first six months, up 69 per cent on year, and raised its year-end goal to $20 billion from $16 billion.
In China, where it sells most of its mobiles, phone revenue rose 124 per cent. On Monday, head of consumer business Richard Yu in a memo touted the success of Huawei's high-end P8. The handset is priced in China well below premium models from rivals such as Samsung. - Reuters
, which fell out of China's top three in the first quarter for the first time since 2011.
"The consumer business group recorded an unexpectedly high rate of growth," Yu wrote without elaborating. Huawei's consumer business division makes electronic goods such as smartphones, smartwatches, tablet computers and modems.
Analysts said Huawei's sales growth may not be down to company strategy alone, and that it may have benefited from pricing or distribution missteps at competitors.
But now Huawei's fast-growing Honor sub-brand has copied Xiaomi's online distribution model, the triple-digit growth rates Xiaomi has enjoyed in China in recent years may be under threat, said Strategy Analytics executive director Neil Mawston.
"They're cutting into Xiaomi's competitive edge," he said. - Reuters

By Reuters

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A Huawei mobile phone is seen in a store in Beijing on July 20, 2015. Chinese telecoms equipment giant Huawei said on July 20 that revenue surged 30 percent year-on-year in the first half, helped by 'solid' sales of smartphones and growth in other business areas.      AFP PHOTO / GREG BAKER
A Huawei mobile phone is seen in a store in Beijing on July 20, 2015. Chinese telecoms equipment giant Huawei said on July 20 that revenue surged 30 percent year-on-year in the first half, helped by "solid" sales of smartphones and growth in other business areas. AFP PHOTO / GREG BAKER
Hostesses hold the Huawei smartphone Ascend P7, launched by China's Huawei Technologies during a presentation in Paris, in this May 7, 2014 file photo. Huawei Technologies Co Ltd doubled its China smartphone revenue in the first half of this year, defying a slowdown in the world's biggest handset market that is enveloping rivals Xiaomi Inc and Samsung Electronics Co Ltd. REUTERS/Philippe Wojazer/Files
Hostesses hold the Huawei smartphone Ascend P7, launched by China's Huawei Technologies during a presentation in Paris, in this May 7, 2014 file photo. Huawei Technologies Co Ltd doubled its China smartphone revenue in the first half of this year, defying a slowdown in the world's biggest handset market that is enveloping rivals Xiaomi Inc and Samsung Electronics Co Ltd. REUTERS/Philippe Wojazer/Files


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