Huawei Consumer Business Group profit increases 28% to $7.3 billion

Mr.Richard Yu, CEO, Huawei Consumer Business Group at HUAWEI P20 and P20 Pro Launch in Paris

Staff Report

Dubai – Huawei on Tuesday released its audited financial results for 2017, reporting solid business growth. The company’s total annual revenue was US$92.5 billion based on year-end exchange rates, an increase of 15.7% over 2016. Net profits were US$7.3 billion, an increase of 28.1% year-on-year.
In Huawei’s consumer business, the Huawei and Honor brands ran full speed ahead, leading to rapid growth in their respective markets. Huawei shipped a total of 153 million smartphones (including Honor) in 2017, and reported US$36.4 billion in annual revenue, up 31.9% year-on-year.
Synergy between Huawei, Honor brands
“In 2017, our dual Huawei and Honor brand strategy took the market by storm. Together, the two brands provide a full portfolio of flagship products. Focusing on innovative features and superior experience, the Huawei brand made many breakthroughs in the high-end market, served a wider audience, and worked hard to deliver the best possible end-to-end experience to consumers. Honor delivered stylish new tech, striving to become an online-only mobile brand that stakes a solid claim in the hearts of younger generations,” the company said in a statement.

Achievements recorded in 2017
• Huawei’s flagship products, the HUAWEI P and Mate series, were hits among consumers around the world, boosting Huawei’s influence in the global high-end market. Overall shipments of the HUAWEI P10 and HUAWEI Mate 9 series exceeded 20 million units.
• The HUAWEI nova series and Honor’s dual flagship series (the V and digital flagship series) further enhanced their presence, with a striking combination of technology and aesthetics. They became trendsetters among young, fashion-savvy consumers, and were generally well received.
• This was a year of market breakthroughs for the G and Y series, and multiple mid-range Honor models. A solid combination of performance and price competitiveness led to rapid, large-scale growth.
• Brand awareness, recognition, and reputation are growing among global consumers, and our market share has risen rapidly. Some of the major breakthroughs achieved in 2017 include:
• Huawei and Honor smartphones together secured more than 10% of the global market share. We are now firmly positioned among the top three phone makers in the world.
• Overall global brand awareness increased from 81% in 2016 to 86% in 2017. Outside of China, brand awareness rose from 64% to 74%.
• The number of consumers considering a Huawei device in non-Chinese markets saw a year-on-year increase of 100%, which put Huawei among the top three global vendors in this category for the first time.
• Our flagship products remained bestsellers after their launch, which raised the market share of our high-end models priced over US$500 to over 10%.
Huawei’s smart devices have also been well received in regional markets. 2017 highlights include:
• Huawei (including Honor) held onto the largest share of the smartphone market in China. We became the most recommended brand in China’s mobile phone industry – a first for a Chinese brand. This award was issued to us by leading brand rating agency, Chnbrand, based on the China Net Promoter Score Index (C-NPS).
• In Europe, Huawei smartphones won high acclaim from consumers in countries such as Germany, Finland, Denmark, Spain, and Italy, improving both our market share and reputation. Huawei ranked as the second most considered brand in a portion of these countries.
• In Asia Pacific, Huawei made new breakthroughs in Japan, Malaysia, and Thailand, where market shares continue to grow. In key countries like Japan, brand consideration doubled.
• In Latin America, the Middle East, and Africa, Huawei’s smartphone business grew steadily, with a market share of over 15%. In key countries including the UAE, Saudi Arabia, South Africa, Mexico, and Colombia, Huawei ranked in the top three for brand consideration, and the gap between Huawei and the top two brands continues to shrink.

Improving experience
The Consumer BG focused on improving user experience in 2017 as market share and brand awareness steadily increased. The company centered its efforts on product innovation, mobile services, channel transformation, and customer service to continually enhance user experience and reinforce our foundations as a premium global brand.
In product innovation, Huawei focus on the practical needs of consumers and common usage scenarios, using artificial intelligence (AI) to improve product performance and design intelligent phones that truly understand us. In October 2017, we launched the HUAWEI Mate 10 series, a true milestone in the industry. This device is the first major step in our evolution from smartphones to intelligent phones:
• The HUAWEI Mate 10 series comes complete with AI cameras, AI-powered smart battery management, intelligent assistants, and intuitive HiTouch functionality. These functions deliver an experience that is both positive and personal, pushing the boundaries of what traditional smartphones can offer.
• EMUI 8.0 leverages AI technology to reduce Android lag, powering phones that are born fast and stay fast.
With superior mobile services, our user base continues to expand. As of Q4 2017, Huawei’s mobile service users surpassed 340 million, with over 30 million in markets outside of China. In retail and channel development, as of December 2017, Huawei had more than 45,000 retail stores around the world, a year-on-year increase of about 10%. We continue to focus on a simple, compelling, and inspired high-end experience, doubling down on quality over quantity.

Specific developments:
• Establishing high-end experience stores in Italy, the UAE, Malaysia, Thailand, and many other countries, bringing the total number of experience stores to over 3,000 worldwide, a year-on-year increase of over 200%.

In customer service, Huawei is constantly expanding service coverage to more regions and exploring new forms of service to provide users with a more convenient and personal experience.
• Offline services: As of Q4 2017, the Consumer BG had over 1,400 offline service centers in 105 countries and regions, including nearly 800 Huawei-branded service stores. Our stores provide a range of basic repair services. Consumers can visit stores for repair. They can also book appointments, receive home service, or mail in their devices. Value-added services like screen insurance, extended warranties, and trade-ins are also available at our stores.
• Online services: Online customer service is now available in 111 countries and regions in 65 languages. Services are available via hotline, the Internet, social media, email, and various selfservice modules, giving consumers access to more convenient, timely, and efficient support.
• In mobile services, the Huawei AppGallery is committed to building a secure and reliable app platform for users, providing a four-layer security check mechanism that helps users defend against app security risks. In 2017, there were 61 billion downloads from the Huawei AppGallery, which also offered more than 600 paid apps across 18 categories. In 2017, progress in Huawei’s proprietary apps and software services.
• In 2017, Huawei accepted 329 consumer requests for local optimization of products and services.