Huawei blames smartphones for its slowing profit growth


In a market which values growth over market share, even just the slowdown of a company's expansion can be somewhat bad news. Such is the case with Huawei, the Chinese telecommunications equipment and smartphone maker, whose recent successes in the mobile phone industry have apparently lowered the company's profit growth for 2016.

This analysis comes directly from Huawei, whose chief executive stated in a press conference that the company, as well as the industry as a whole, has faced financial troubles in the past year, a fact which can be attributed to a greater share of revenue from the consumer market, where profit margins are smaller and the competition is bigger. Or in other words, the company's greater focus on devices such as smartphones and wearables has apparently put a strain on its financials.

And this might not be the best news for fans of Huawei's smartphones, as the company's CEO, Eric Xu, reportedly stated: “We’re going to pay more attention to increasing our efficiency and reducing investments that cannot bring value." Whether phones fall into that category isn't immediately clear, but with the impressive reported device shipping numbers of more than 139 million, it's more likely that they don't.

In any case, Huawei has previously expressed interest in expanding its smartphone business – we've been hearing rumors of a possible carrier distribution deal being in the works with AT&T, which could finally expose the company's devices to the mainstream US market. Right now, Huawei lacks a significant fingerprint in the States, despite the release of its then-flagship Mate 9, as well as its budget sub-brand honor's moderate success. If that deal comes to fruition, it could also mean that the successor to the Huawei P10, which has sort of been confirmed to be in the works, might become the first mainstream flagship from the company to be released stateside.

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16 Comments

1. Phonehex

Posts: 768; Member since: Feb 16, 2016

Huawei , Maybe they make good phones , but with a tongue twisting name like "WHOAAWHEY" .... Very tough to become popular mainstream in the western world !!

2. Spyro

Posts: 334; Member since: Mar 29, 2017

How does name pronunciation have anything to do with brand popularity?

5. Phonehex

Posts: 768; Member since: Feb 16, 2016

I somehow feel it does. Imagine you put a gorgeous Huawei phone on a table in front of your friends in a party/get together . Most of the non tech ppl wont know Huawei . Someone asks what phone is that ..... you say "whoaawhey"...they go like... "who0" what?.... you go like "WHOOAAWHEYYY !!" ...they again mostly will like.. "WHOOO " what?? They you end up saying.. never mind. Its a phone from Asia !

8. Spyro

Posts: 334; Member since: Mar 29, 2017

The US isn't the only market. Here in my country, Huawei is a popular known brand. It's not even a ridiculous sounding name. The way you explained it is like a child trying to say the word "apple".

10. mahima

Posts: 744; Member since: Nov 20, 2014

it just may, xiaomi is kind of awkward to pronounce but their smartphone names Redmi and Redmi Note is kind of catchy, and maybe they used MI for a reason when they go international. Just like Xiaomi, Huawei is not easy to spell and pronounce compare to lenovo, nokia, samsung or zte

7. Bondurant

Posts: 786; Member since: Jun 04, 2014

Not sure why Nokia, Motorola or Lenovo are mainstream names. I'm using Huawei for 4 yrs and no one had an issue with its name.

9. Phonehex

Posts: 768; Member since: Feb 16, 2016

@Bondurant No one has an issue because no one knows about its existence .

3. libra89

Posts: 2318; Member since: Apr 15, 2016

Hmm, that's an interesting statement.

4. Lenny86

Posts: 301; Member since: Sep 20, 2012

Huawei was good making nice handsets for value. They got expensive that is all. The new p10 £590 in uk, s8 £650 on deal. HMMMM

6. Bondurant

Posts: 786; Member since: Jun 04, 2014

Huawei still making budget handsets under Honor sub brand. If price is to be blamed then iphone and Samsung have far higher prices.

11. VasiliS7

Posts: 203; Member since: Jan 10, 2017

You can't pretend the Apple or Samsung you must the Apple or Samsung to have profits. There is no room for 2nd player in android.

12. VasiliS7

Posts: 203; Member since: Jan 10, 2017

*edit you must be..

13. Bondurant

Posts: 786; Member since: Jun 04, 2014

They aren't pretending but they surely are competing and them being third leading phone manufacturers it is what they should be doing. But some tend to think that Huawei should stick to One plus style 400$ handset selling them online to be successful. Lol.

14. epdm2be

Posts: 827; Member since: Apr 20, 2012

If the name is a problem then buy Honor instead. The Honor 8 is basically a P9 without the Leica branding (with more ram and better looks). I'm sure a Honor 9 is in the makes.

15. pendragon0202

Posts: 164; Member since: Feb 23, 2015

Actually it is all about Chinese phone market. HUAWEI has been slowly pushed away by cheaper and more aggressive Oppo and Vivo. Just the way they killed off Xiaomi success. It seems a dog eat dog battle in China and who knows which new kid on the block will challenge Oppo and Vivo next.

16. strikerchooooo unregistered

Don't pay too much attention to a yellowish copycat company such as this. In my country its name means wave your dick, so...hell of a name, huh!:)))

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