Huawei said Tuesday the company’s revenue in 2019 is expected to jump 18% year on year despite a series of campaigns led by the Trump administration against the telecommunications gear maker this year.
Why it matters: The growth rate is slightly lower than last year. In 2018, the company’s revenue grew 19.5% year on year.
- The company also predicted that the coming year would be a “difficult year,” and that it would not be removed from the US “Entity List,” which bars American companies from supplying to Huawei without government approvals.
Details: In a New Year’s message to employees, rotating Chairman Eric Xu said they expected revenue in the year to reach a record RMB 850 billion (around $121.7 billion). He added that the figures failed to meet the company’s predictions earlier this year.
- The Shenzhen-based company, also the world’s second-largest smartphone vendor, said handset shipments had exceeded 240 million units and the business is in “robust growth.”
- Huawei will “go all out” to build the Huawei Mobile Services (HMS) ecosystem to ensure it can keep selling smartphones in overseas markets, said Xu. HMS is an alternative to Google Mobile Services (GMS), which pre-installs popular Google apps and services on Android phones. Huawei is not authorized to use GMS due to the US export ban.
- “Our predictions every year are very radical, that’s why we said the figures failed to meet expectations,” said a Huawei spokesman to TechNode on Tuesday.“But the 18% [annual growth rate] is good enough, and it is also pretty good compared to other companies,” he said.
“Survival will be our first priority…We will focus on the following four areas: sustaining growth, improving our capability, optimizing our organization, and controlling risks.”
—Eric Xu, in his New Year’s message to employees.
Context: Huawei said in October that its revenue for the first three quarters grew 24.4% year on year to RMB 610.8 billion. It announced in July that revenue in the first half of the year grew 23.2% year on year to RMB 401.3 billion.
- The company doesn’t reveal quarterly earnings before this year.
- In June, Huawei founder and CEO Ren Zhengfei said he expected the US trade blacklist will reduce production output by $30 billion over the next two years.
- Huawei, which reported revenue of RMB 721.2 billion last year, re-evaluated its revenue targets to around $100 billion this year and the next, according to Ren. It had initially forecasted revenue growth in 2019 of between $125 billion and $130 billion depending on foreign exchange fluctuations.