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Posted by Dan Bieler on May 7, 2013
Dane Anderson, Dan Bieler, Charlie Kun Dai, Chris Mines, Nupur Singh Andley, Tirthankar Sen, Christopher Voce, Bryan Wang
Huawei is one of the most intriguing companies in the ICT industry, but its overall strategy remains largely unchanged: imitating established products and services, then adjusting and enhancing them, and making them available at an attractive price point. But to be fair: Huawei is pushing more and more innovative products.
In 2012, Huawei’s annual revenue growth slowed down to 8% to CNY 220 billion (about US$ 35 billion). During the same period, its EBIT margin remained flat at 9%, despite the changing revenue composition due to the growth of its consumer and enterprise business. Unlike last year’s event which was dominated by the announcement to push into the enterprise space, this year’s Global Analyst Summit in Shenzhen saw little ground breaking news. It was more of a progress report:
Any snapshot view of Huawei must keep in mind that its ambitions are very long-term in nature. Huawei itself said that no single provider so far has managed to succeed in all three areas that Huawei is targeting now: carrier networks, enterprise infrastructure, and consumer devices. To succeed Huawei needs to:
So what is the best analogy to understand and predict Huawei’s future path? Will Huawei encounter the same struggles overseas that Japanese players like Fujitsu, Hitachi, and NEC did for years? Or will Huawei follow Ericsson’s or Nokia’s path that parlayed network strength into the enterprise and consumer markets with some global success. Maybe Lenovo provides a better model by dominating a "box" business while taking down some formidable competitors. Most likely, there will be elements of all three scenarios in Huawei’s future. One thing is for sure: Huawei is here to stay.
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