Huawei Consumer Business Group announces strong 2016 performance

Huawei Consumer Business Group (CBG) revealed its expected 2016 annual performance figures. For 2016, CBG predicts sales revenue of 178 billion RMB, 42% up from a year ago, achieving steady growth for the fifth consecutive year. Smartphone shipments also reached 139 million units with 29% year-on-year growth; according to IDC, the increasing rate of global smartphone shipments was only 0.6% in 2016, which means Huawei is outperforming the overall market.<1>

Richard Yu, Huawei CBG CEO, said, “Despite tough market conditions Huawei CBG is still growing with industry-leading speed. This can be attributed to our consumer and innovation-centric approach, as well as our ongoing commitment to building a premium brand, reinforcing our global channels and ensuring consistent, high-quality service. In 2017, we will strengthen our supply chain, channels, R&D, services and any other areas required to streamline our operations, improve the efficiency of our decision-making and implementation, drive our internationalization strategy and proactively develop future capacity.”

Focus on meaningful innovation and lead new technology trends

While the global smartphone industry is slowing down and lacks innovation, Huawei CBG builds on its product leadership and leads a new trend of industry innovation by pioneering ground-breaking developments in key technology areas. In 2016, Huawei CBG has focused on developing meaningful innovations and has made breakthroughs in the areas of operating system (EMUI based on Android), dual camera technology, artificial intelligence and more.

For the operating system, in order to solve the issue of Android phones slowing down over time, which has frustrated Android users for years, Huawei softwareR&D team, led by world-class Linux professionals, conduct in-depth optimization on the Android system. Based on this work, Huawei unveiled EMUI 5.0 – software that is deeply integrated with the Kirin chipset and contains 20 Huawei patented technologies, to take full advantage of the combination of Huawei software and hardware. This includes highly optimized system resource allocation controlled by a smart learning system and further optimized Android system applications – completely resolving the long-term Android performance flaw and bringing a new Android experience to users.

For dual-camera photography, Huawei and Leica jointly developed two generations of dual-camera technology in 2016, leading a new trend of smartphone photography and establishing new benchmarks for image quality that made the Huawei P9 and Mate 9 popular with consumers. In September 2016, Huawei also founded the Max Berek Innovation Lab with Leica. In the future, this innovation lab will conduct joint research and development in the fields of optical systems, imaging algorithms, VR and AR.

For artificial intelligence, Huawei focused on perception intelligence, cognitive intelligence and computational intelligence, and created an artificial intelligence system based on collaboration between software, the device and the cloud. Huawei has also made technological breakthroughs in areas such as sensor algorithms, computer vision, search engine, semantic understanding and introduced Huawei situational intelligence (HiBoard) that can provide smarter services to users in different scenarios. Huawei has also launched a desktop search function that enables users to get more results in a shorter time frame with higher accuracy.

Thanks to these technological advancements, Huawei’s flagship products like P9, Mate 9 and Honor 8 have achieved global recognition with consumers. Huawei P9 and P9 Plus global shipments exceeded 10 million units, making them the first Huawei flagship handsets to break 10 million sales. The Huawei Mate 9 series, shortly after launching in November 2016, faced a supply shortage due to overwhelming demand and its sales in the first two months were 50% higher than those of Mate 8 for the same period. The Honor flagship smartphone, represented by Honor Magic, is also popular with consumers and showcases Huawei’s exploration into future Intelligent Phone technology.

Meanwhile, Huawei’s cloud service-centered consumer ecosystem is taking shape in China, offering global business opportunities to developers and forming an open and transparent Huawei software ecosystem. Today, Huawei CBG has over 200 million cloud service mobile users and over 22 million registered developers. Partners were sharing over 2.8 billion RMB in revenue in 2016 through Huawei cloud services.

Complementary channels and services further build Huawei’s global, high-end brand

While developing its high-end product portfolio in 2016, Huawei also invested in building its global channels, service infrastructure and brand to ensure high customer satisfaction and positive brand perception.

For pre-sales and after-sales, Huawei built five global service centers that support 105 countries through hotline services. Huawei also has over 460 service stores covering 45 countries around the world. According to IPSOS research figures, Huawei ranks no.1 in customer satisfaction among users in China, Poland, Mexico, Egypt and many other countries.

The Huawei Consumer Life-cycle Service System, which focuses on consumer cloud, pre-sales and after-sale services, was also further optimized. Within the full life-cycle of a device, Huawei offers global users safe, diverse and high-quality application services. Currently, Huawei’s app store provides the best security system in the industry with a four-layer safety guarantee mechanism of developer real-name verification, system testing, human review and user reporting – which handled over 240,000 risky apps in 2016.

The Huawei app store is now seeing growth in user loyalty. In 2016, the Huawei app store distributed a total of 45 billion applications. Huawei Pay supports over 32 bank cards in China as well as public transportation card services in Beijing, Shanghai, Guangzhou and Shenzhen. An overseas-based basic cloud service is also under construction. Recently, Huawei has successfully launched online themes and a magazine lock screen in over 170 countries. These have helped to diversify overseas business and expanded our basic cloud services globally.

For channels, Huawei greatly improved its open market channel capacity and the share of open market channels rose to 71% in 2016, 13% up on 2015. Huawei’s global retail network now has over 70,233 stores. Huawei has built long-term stable partnerships with hundreds of distributors and retailers all over the world. Most notably, market channel coverage rose over 50% in Italy, Spain, Poland, Egypt and Saudi Arabia.

For brand building, in 2016 Huawei focused on developing world-class global marketing campaigns and entered design, fashion, entertainment, sport and other fields that resonate with its diverse target audiences on an emotional level. Huawei successfully recruited global football icon, Lionel Messi to be a Huawei ambassador and Hollywood stars Henry Cavill and Scarlett Johansson as P9 spokespeople. Huawei also cooperated with international high-end fashion platform VOGUE and other fashion week events.

Huawei’s brand value has been highly recognized by global brand authorities. Huawei was listed again in the Interbrand Top 100 Global Brands, ranking 72th; while it entered the BrandZ Top 100 Most Valuable Global Brands at 50.

According to IPSOS research, Huawei global brand awareness rose from 76% in 2015 to 81% in 2016. Significantly, overseas users’ consideration and preference for Huawei rose by 66.7% and 100% respectively from 2015. Sleek design, fashion and powerful innovation are keywords that overseas users associate with Huawei smartphones. Research also showed that 31% of Huawei overseas users also belong to the top 30% high-income earners in their countries.

Huawei CBG breaks into European high-end market and achieves balanced, steady development on the global stage

In addition to increasing product leadership and global high-end brand influence, in 2016 Huawei CBG broke into the European high-end market and gained balanced and steady growth in many markets around the world. Huawei’s overseas smartphone shipments equaled domestic shipments and its mid-high end handset shipments rose to 36%.

According to data released in October 2016 by GFK, Huawei’s global smartphone market share rose to 11.3%<2>.

In Europe, Huawei CBG has achieved great breakthroughs in the European high-end market thanks to strong sales of P9 and P9 Plus. GFK data showed that currently Huawei holds over 15% market share in 30 countries and over 20% in another 20 countries, half of which are European countries. In north-east Europe and Western Europe, Huawei’s market share exceeded 15% and 10% respectively. Particularly in some northern European countries Huawei holds a dominant market share and in the UK, France, Germany and other key markets, Huawei CBG made significant progress.

In China, Huawei’s market share exceeded 20% for the first time in November 2016 and dominated the 500-600 USD high-end market.

In addition to its smartphone business, in 2016 Huawei proactively developed in fields like PC/tablet, wearables, smart home, Internet of Vehicles (IoV). Innovative products like MateBook also received a positive public reception. The company’s tablet business increased dramatically despite wider negative conditions in 2016 and recorded strong performance across both B2B and B2C areas. Total shipments exceeded 10 million units in 2016 with 90% growth year-on-year. For smart home, the HiLink-centered smart home eco-platform has been adopted by Haier, Gree and other mainstream home appliance leaders, forming an ecological prototype. Huawei’s automotive innovations also attracted international tier one brands like Audi and Volkswagen.

In 2017, Huawei CBG will continue to put consumer needs first and will develop a consumer-facing system focused on channels, retail, brand, marketing and services, to strengthen its business base and streamline its operations and customer service. In the meantime, Huawei is committed to making further breakthroughs in innovation that will help consumers have a more intelligent, connected lifestyle. We will continue building on our core competencies to lead the future and become a popular cultural and technical brand for consumers.