China's Huawei Sees Strong Comeback in 2012, Despite U.S. Scrutiny
January 21, 2013 2:54 PM
comment(s) - last by
Chinese telecom equipment and smartphone manufacturer beats out domestic rival ZTE
It was a rocky week for one of China's top two smartphone and telecom equipment OEMs and an optimistic one for the other. ZTE Corp. (
) on Sunday reported that it would likely lose 2.9B yuan ($466.2M USD) for 2012. ZTE is China's second largest telecommunications equipment maker.
The news was quite different for Huawei Technologies Comp. (
), however. Huawei
a 2012 profit of 15.4B yuan ($2.48B), in line with its guidance, on revenue of 220.9B yuan ($35.5B USD). The recovery, as promised, from a "slow" 2011 in which Huawei "only" pocketed 11.6B yuan ($1.86B USD) cheered analysts.
I. U.S. Scrutiny Won't Stop Our Growth, Huawei Says
Jessie Yu, an analyst with Frost & Sullivan
, "Huawei has a better long-term outlook (than ZTE) because it has telecom equipment, enterprise and handsets business. Its handsets are doing quite well and it has maintained its telecom equipment share. There is also some pickup in its enterprise business, so overall, its revenue channels are wider than ZTE."
Huawei Chief Financial Officer Cathy Meng addressed recent U.S. security scrutiny in her company's earnings conference. Ms. Meng is the daughter of former People's Liberation Army (PLA) officer and current Huawei CEO Ren Zhengfei, who founded the company almost two and a half decades ago. In her talk she said that
Huawei illegally resold electronics
from American OEMs to Iran would not hamper the Chinese giant's growth.
blamed the sales on a miscreant partner
, an approach that it has used to escape fines or prosecution in the U.S. in the past. Huawei's rival ZTE is facing similar allegations. China and Iran are close trade partners, however, it is illegal for the Chinese companies to resell
electronics to Iran, creating an awkward arrangement.
Huawei CFO Cathy Meng [Image Source: Huawei]
Comments Ms. Meng regarding the accusations, "We feel that security concerns in the United States are restricted within the country and that won't have an impact on strategic decisions made by other countries. Over the past 20 years, we have not had any incidents based on security issues."
While Huawei has been banned on bidding on certain government networking contracts in the U.S. and Australia due to spying concerns (given the company's close ties with China's PLA), Huawei is a top seller of telecommunications equipment throughout most of Asia, Africa, and Europe.
II. Company Predicts Big Growth in 2013
Ms. Meng said she expects bright growth for Huawei, remarking, "Cloud computing is a huge sector in the next five years. In the telecom industry, we are expecting a 5 percent increase in capital investments. Smartphone penetration is still way too low and there is a lot of room for growth. These three areas will create a lot of opportunities for us."
Currently Huawei is privately held, although there is a private share listing for employees. The company's 64,000 employees partially own it. There is much international interest in a possible public offering. Rival ZTE is partially publicly held. On that issue Ms. Meng would only say, "We've always kept an open mind when it comes to the listing issue."
Analysts say a public offering of Huawei stock would require a lot of work, but could be an interesting proposition, given the company's bullish record. [Image Source: AFP]
Huawei and ZTE have both posted bullish outlooks for 2013.
Huawei is currently the sixth largest seller of mobile phones (total sales of both feature phones and smartphones) worldwide. It hopes to improve upon that position in 2013 and build its
smartphone brand recognition
in lucrative markets like Europe and the U.S. Huawei is also looking to make a push into the tablet computer space, although that effort is still far more unproven.
This article is over a month old, voting and posting comments is disabled
RE: Even More Disturbing
1/22/2013 11:23:18 AM
I think he's proposing americans take wage cuts across the board, as well as the government lowering taxes on corperations to make US manufacturing competitive with chinese manufacturing again. You don't have to go to their level, just far enough to make it unprofitable to have the chips made there and then be shipped all the way to America.
Cause you're not gonna get your manufacturing base back any other way. If there's a buck to be made the US is as bad as anybody else so if it's cheaper to get it made overseas, it'll be made overseas. You can ofcourse tariff the hell out of it but then your own exports to china will be tariffed by them as well, forcing further cuts on your own side (trade wars never end well).
It's hard to put your money where your mouth is though.
RE: Even More Disturbing
1/22/2013 3:25:41 PM
you can make taxes 0% and they would still ship the jobs to china if its more profitable for them.
Top 1% only cares on earnings, not on who makes their shit.
"We’re Apple. We don’t wear suits. We don’t even own suits." -- Apple CEO Steve Jobs
CES 2013: Huawei Shows Off Its First Windows Phone 8 Smartphone, the Ascend W1
January 8, 2013, 6:45 PM
Huawei Blames Plan to Funnel Electronics to Iran on Partner
December 31, 2012, 6:20 PM
Sources: White House Report Shows No Sign Huawei is Spying on the U.S.
October 18, 2012, 3:20 PM
House Panel Wants to Ban Chinese OEMs from U.S. Smartphone and Router Markets
October 8, 2012, 11:31 AM
OnePlus Ditches Invite System for 1st-Gen Phone, Will Bring it Back for Round "2"
April 20, 2015, 2:52 PM
Apple Plans In-Store Workshops to Teach Users How to Use Its Smartwatch
April 17, 2015, 1:02 PM
Report: Apple Racks Up Nearly 1M Apple Watch Preorders
April 13, 2015, 3:26 PM
Sharp Unveils World's First "4K" Phone Display at Mind-Boggling 806 PPI
April 13, 2015, 11:24 AM
TSMC Hypes Its Upcoming 10 nm Process, Amid Struggles to Hit Volume at 16 nm
April 10, 2015, 7:57 PM
Samsung 's Galaxy S6, Profit Surprise Overshadow Prolonged Revenue Slump
April 8, 2015, 9:24 AM
Most Popular Articles
Windows 10 Build 10056 -- What's New in the Latest Leak
April 13, 2015, 10:38 PM
Tech's Biggest Loser on Tax Day: eBay Pays Nearly 99 Percent Tax Rate
April 15, 2015, 3:28 PM
Mathematician's Sociological Formulation May Explain the "Hipster Paradox"
April 14, 2015, 1:13 PM
Editorial: TinEye is an Essential Search Engine That Too Few Know About
April 14, 2015, 10:58 PM
Testers Trolled by Promise of Uninstallable Windows 10 Preview Build 10061
April 16, 2015, 2:52 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information