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Huawei financial results show rising contribution by African market

Huawei financial results show rising contribution by African market

Huawei has pointed out the growing contribution that the African market is making to the company's global profits as part of a newly released annual report on the company's financial performance in 2017.

The ICT firm says its smartphone business in particular grew steadily with a market share of over 15% across Africa and a ranking in the top three for brand consideration in its strategic South African market. It also recorded an increase of 15.7% year-on-year in total annual revenue to US$92.5 billion in 2017

Ken Hu, Huawei Rotating Chairman said while all these developments are encouraging, the company aims to grow even further in 2018 by focusing on rollout of the latest innovations.

"As we look to 2018, emerging technologies like the Internet of Things, cloud computing, artificial intelligence, and 5G will soon see large-scale application. Throughout this process, Huawei will stay at the forefront of technological innovation and business transformation. More importantly, we will pay special attention to the practical challenges that our customers face as they go digital. Our job is to help them overcome these challenges and achieve business success. Ultimately, we aim to bring digital to every person, home and organisation for a fully connected, intelligent world."

Huawei's Carrier business group generated US$45.7 billion in global revenue, an increase of 2.5% year-on-year in 2017 while its Enterprise business group amassed US$8.4 billion in annual revenue over the twelve months which is an increase of 35.1% compared with 2016.

The consumer business, which is home to the Huawei and Honor brands, shipped a total of 153 million smartphones in 2017, and reported US$36.4 billion in annual revenue, up 31.9% year-on-year.

Phased approach to Honor

The company added that overall revenue from Europe, the Middle East, and Africa (EMEA) rose 4.7% year-on-year to US$26 million.

Chris Sun, Vice President for Honor in Middle East and Africa, based at Honor regional headquarters in Dubai, told ITWeb Africa that the Honor brand, launched for African customers two weeks ago, will be introduced across the continent through a phased approach.

"South Africa is the first market for Honor in the continent and this is based on user demand. Obviously South Africa is the biggest market in terms of population and value, South Africa also has the highest young population which means it fits with Honor's objectives. Our focus on online platforms for this brand is in order to use them for sales as well as for communication. Although the continent is not used to online purchases, in terms of mobile internet penetration it is very high which makes online platforms the right place to engage our customers."

Huawei is set to launch its latest P20 device into the African market in Johannesburg later today.

In February, research from Gartner showed that as global smartphone sales recorded the first ever decline during the fourth quarter of 2017, Chinese brands Huawei and Xiaomi were the only brands to experience growth.

Huawei's new smartphone additions, including Mate 10 Lite, Honor 6C Pro and Enjoy 7S, helped broaden the appeal of its smartphone offerings, according to Gartner.

Likun Zhao, General Manager for Huawei Consumer Business told ITWeb Africa at the launch of the company's PSmart mid-range device for African consumers in February that they paid more attention to the flagship devices in 2017, but will be making a switch to focus more on mid-tier and low-tier smartphones in 2018.

"Our performance in the high-end market was very good because at the end of last year our market share (for prices exceeding US$600) was 15.5%. At the beginning of last year it was only 7%, which means we doubled it and that is a good performance. We want to make progress within the high-end, but for the mid-tier we want to enlarge that market by bringing (in) more low-end consumers. At the same time we want to catch up on market share in the mid-tier. For the low-end we will come back and play an important role."

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