Huawei Revenues Jump by 42% But Profits Still Decline

By all accounts, Huawei had an incredible 2016. The company consolidated its position as the 3rd-largest smartphone company and achieved record sales figures, however, not all the stats proved that pleasing.

Surprisingly, despite selling 30 percent more phones than it did last year, the profit that it made was lower by 10 percent than it was in 2015, clocking in at $2 billion rather than $2.2 billion.

Unsurprisingly, the revenue increased for the company, reaching $26 billion or up by the tune of 42 percent, however, various expenditures and rising costs made sure that less money was ultimately left in shareholders’ pockets.

Even here, there is a bit of a silver lining since the company spent more money on R&D than before, something which could potentially be useful going into the future.

There’s also the element of rising component costs, as well as a rising marketing bill, which is expected given the company’s rampant expansion into new markets. The company is also known to give additional benefits to carriers as well as exclusive deals to its infrastructure partners, which invariably raise costs.

All these measures are perhaps important, making the company focus on growth rather than profits. At least that’s what it hopes will bring it profitably in the long-term future as the brand name becomes more known and reliable in new markets.

With Mate 9, P9 and Honor 8 carrying Huawei through most of this year as its best sellers, the company still expects more profitability for 2017, where it expects its profits to double to $4 billion- the highest in the company’s history.

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