Huawei’s Products and Approaches to Generate Revenue

Huawei’s products and approaches to generate revenue.

Huawei Technology Corporation, a private enterprise, provides telecommunication networks and services and solutions encompassing wireless products, core networks products, applications and software, as well as terminals products and etc. (Zhu, 2008). Huawei is “the second largest telecommunication equipment supplier, the third largest smart phone manufacturer, and the leading supplier of information and communication solutions in the world”(Peng, Peng, Song, & Zhang, 2015),  providing both manufactured and innovative products. Adopting the product plus services strategy, Huawei provides its customers with supportive product-related services to enhance product performance and build long-term customer relationship.

According to Huawei’s annual report (2015), in the year 2015, Huawei reached the revenue of CNY395 billion, achieving an increase of 37% compared with that in 2014, with China and EMEA being the main revenue gaining region. To be specific, Huawei have two main approaches to gain profit: sales of smart phone and providing innovative products.

Huawei is known to all as a new started mobile phone company, providing smartphones with comparatively low price and high performance. According to the research of sales share of each mobile phone brand in year 2012(figure 3.1), Huawei gains 14% of the overall smartphone market shares, ranked only behind Samsung and Apple (Jia & Yin, 2015). Nowadays, improving smartphone sales is one of the most important approaches of making profit. In the first half year of 2015, Huawei sold 48.2 million units of smartphones, achieving an increase of 35% compared with that in 2014 (Zhu, 2015). Since the year 2013, Huawei adopted the brand mission of “Make it Possible”, and used the market-oriented strategy, officially breaking into the high-end smartphone market (Zhu, 2015). Till now, Huawei has gained high market reputation of producing high performance product using proprietary techniques. At the same time, Huawei gradually raises its product price, adjusting its objectives from maximum business volume to maximum profit (Zhu, 2015).

[pic 1]

Figure 3.1 Sales share of each mobile phone brand in December 2012.

Source: Analysis of Nokia’s Decline from Marketing Perspective, Business and management 

Huawei pays attention to the research and development function, aiming to explore proprietary techniques. Huawei provides consumers with hi-tech techniques, patented applications and core components such as mobile phone chips, through which to make profit. According to its annual report (2015), Cumulatively, Huawei spent more than CNY240,000 million on R&D over the past decade and in return, it had filed 52,550 patent applications in China and 30,613 outside China by December 31, 2015. As for the mobile phone chips, the exploration of Haisi chip in Huawei not only reduces the cost of importing international manufacture but also increase the sales revenue of selling chips to other mobile phone companies (Zhu, 2015).