Huawei communications equipment business has stalled
Huawei first quarterly performance announcement is rare. In the first quarter of this year, its revenue increased by 39% year-on-year. The slight increase in net profit margin to 8% means that its net profit has also increased. Faced with well-known difficulties, it is able to deliver such an excellent performance. It is undoubtedly encouraged by its report card, and its choice to release quarterly results at this moment undoubtedly also has a morale-boosting meaning, but the performance also shows that its communications equipment business is stagnating.
Mobile phone business
Huawei announced that its mobile phone shipments in the first quarter reached 59 million units, an increase of more than 50% compared to the 39.3 million units shipped in the first quarter of last year given by the market research agency, and a year-on-year increase of more than 30% in smartphone shipments compared to last year. Shows the momentum of accelerated growth.
While Huawei’s mobile phone shipments have increased significantly year-on-year, the average price of mobile phones has also increased significantly. The revenue of the final consumer business has increased by more than 70% year-on-year, showing that Huawei’s high-end mobile phones have been recognized by the market. According to data released by counterpoint, the top three global high-end mobile phone markets in 2018 were Apple, Samsung, and Huawei, with market shares of 51%, 22%, and 10%, respectively. Among them, Apple and Samsung’s market share declined, while Huawei It has risen by a quarter, and its achievement in the first quarter means that its share in the high-end mobile phone market has further increased.
According to Huawei’s 2018 results, the consumer business revenue reached 348.9 billion yuan, accounting for 48.4% of the overall revenue. In the same period, the operator’s business revenue was 294 billion yuan. This is the first time that the consumer business surpassed operations. The commercial business has become Huawei’s largest source of revenue, and the consumer business has increased by 45.1% year-on-year, while the carrier business has fallen by 1.3% year-on-year. The consumer business has officially become the engine of Huawei’s performance growth.
In the first quarter, the revenue growth rate of the consumer business further improved, which means that the proportion of this business in Huawei’s overall revenue is further increasing, and the consumer business should also be the fastest growing business in the quarter.
Communication equipment business has stalled
From the data released by Huawei, it can be seen that while the consumer business, the largest source of income, has achieved a year-on-year growth of more than 70%, its overall business revenue growth rate is only 39%. It is estimated that the growth rate of its revenue should be dragged down. It is still the operator’s business in charge of communication equipment. Based on this, it is estimated that its communication equipment business should not increase in the first quarter or may even decline as last year.
When Huawei announced its first quarter results, it emphasized that its 5G base station shipments had reached 70,000 units, but this time it did not emphasize that it ranked first in the 5G equipment market, and it should have fallen behind other communications in terms of 5G base station shipments. Equipment vendors.
Due to well-known reasons, Huawei is currently unable to enter the U.S. market, which makes the U.S. market a paradise for Ericsson, Nokia, and Samsung. In order to gain more say in the 5G era, the U.S. is accelerating the commercialization of 5G. U.S. operators have obtained a large number of 5G equipment orders, and Samsung has obtained large orders from Verizon, the largest U.S. operator, giving Samsung, a rising star in the communications equipment industry, a chance to rise.
The European market is Huawei’s best-developed market in overseas markets. However, the European market has also encountered obstacles due to US factors. This has made two European communication equipment companies, Ericsson and Nokia, a big gain. The Danish operator TDC has It is announced that Ericsson will replace all Huawei equipment, which provides development opportunities for the two European communications equipment vendors.
Here I will focus on Samsung. Samsung also planned to enter the communications equipment market in the 4G era, but it ended up in no time. Now it has achieved certain results at the beginning of 5G. In addition to winning many orders in the United States, it claims to only The number of 5G base stations shipped in South Korea has reached 50,000. It is estimated that the shipments of 5G base stations in these two markets alone have surpassed Huawei. In addition, it has also established a joint venture with Japanese communications equipment manufacturer NEC to develop 5G equipment for it. Entering the Japanese market has opened up the channel, and it is becoming a rapidly emerging communications equipment supplier in the 5G era.
So it’s not surprising why Huawei’s communications equipment business has stalled. Huawei seems to have realized that it is not easy to break the deadlock in the communications equipment business in the short term. In the next five years, it will achieve revenue of 150 billion US dollars, which is a double increase in revenue from last year. If this goal is achieved, Huawei will become the world’s largest mobile phone company in the future.