Huawei $46 Billion In Sales Revenue Highlights Growing Boom Of Chinese Companies In Smartphone Wars

Huawei founder Ren Zhengfei worked as a Chinese People's Liberation Army technician before launching the massive telecom-equipment company, a tie that's attracted the attention of U.S. lawmakers. Reuters/Bobby Yip

The Chinese telecommunications-equipment company Huawei Technologies Co. Ltd. anticipates its already impressive annual revenue to continue growing, according to a new year’s message from CEO Ken Hu cited by Reuters. Because of advances in cloud computing and higher demand for smart devices, the firm expects to have booked $46 billion in sales last year, a boost of 15 percent year over year. It previously reported its smartphone segment alone had $11.8 billion in revenue in 2014, an increase of more than 30 percent on the same basis.

With three executives who share CEO duties in six-month rotations, the privately held Huawei said last year it would achieve sustainable growth in 2014 and targeted sales of $70 billion by 2018, Reuters reported. The company’s smartphone shipments topped 75 million units, a 40 percent increase over the previous year, but the total still fell short of its lofty goal for last year.

Huawei isn’t alone in its push to the top of the smartphone market. Chinese telecom-equipment outfits Lenovo Group Ltd. and Xiaomi Inc. also experienced impressive growth last year. Together, the three are beginnning to nip at the heels of the smartphone megapowers, the American Apple Inc. and the South Korean Samsung Electronics Co. Ltd. As of the third quarter of last year, these companies were the top five firms ranked by global smartphone sales, according to the market researcher Gartner Inc.

“Over the holidays, we expect record sales of the [Apple] iPhone 6 and iPhone 6 Plus, but we should not underestimate the Chinese vendors and local brands,” Annette Zimmermann, research director at Gartner, said in a statement last month. “Chinese players will continue to look at expanding in overseas emerging markets.”

The trio of Chinese companies delivered on that expectation in the third quarter, with Huawei leading the charge by selling more than 16.3 million units, an increase of about 2.8 million units over the same period a year earlier, Gartner reported. Still, the biggest mover in China’s boom may be Xiaomi, which rebranded itself as Mi in 2014 and launched in 10 additional markets, including India, Brazil and Russia.

Xiaomi announced recently it was valued at $45 billion after a $1.1 billion funding round. That valuation placed it ahead of Uber, the popular transportation app valued at $41 billion, as the most valuable venture-backed company in the world, according to the Washington Post.

Some investors believe Xiaomi could grow to the size of fellow Chinese technology behemoth Alibaba Group Holding Ltd., which launched an initial public offering of $25 billion on the New York Stock Exchange in September and closed with a market capitalization of more than $257 billion Friday.

“It has significant potential to become China’s first global consumer brand,” the Russian billionaire investor Yuri Milner said of Xiaomi in an interview with Bloomberg News. In smartphones, he said: “Xiaomi can take significant market share globally, but that doesn’t cover the whole opportunity. There are a number of other interesting categories that Xiaomi can target.”

Milner added: “I don’t think there’s any company that has reached $1 billion in revenue as fast as Xiaomi. In every conceivable benchmark, it’s almost unprecedented in terms of its speed of growth.”

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