Kill Ericsson Huawei into the world's largest equipment supplier

A few days ago, Ericsson released its 2013 full year and fourth quarter earnings. The financial report shows that its annual net sales of 227.4 billion Swedish kronor (about 35.3 billion US dollars), the same as in 2012; net profit of 12.2 billion Swedish kronor, an increase of 105% (about 1.86 billion US dollars). Although Ericsson turned around in 2013, it was surpassed by Huawei for the first time in sales.

Huawei announced on January 15 that its annual sales revenue was 238 to 240 billion yuan, or about 393 to 39.6 billion US dollars. In this way, Huawei has naturally taken the top spot in the global telecommunications equipment industry.

Huawei’s chief financial officer Meng Xizhou said that Huawei’s operating cash flow and asset-liability ratio remained stable in 2013. The Group insisted on implementing management changes and achieving continuous improvement in operational efficiency through simplified management. The compound revenue growth rate will remain at 10 in the next five years. The level around %.

Huawei surpasses Ericsson to become the world's largest equipment supplier

In fact, Huawei's momentum as a global equipment supplier was as clear as it was in 2012. In the first half of 2012, Huawei once surpassed Ericsson's $15.25 billion in revenue of $16.1 billion, but was overtaken by Ericsson in the second half of the year. In 2012, Huawei's revenue was 220.2 billion yuan (about 35.36 billion US dollars), and net profit was 15.4 billion yuan (about 2.469 billion US dollars). From the perspective of revenue scale and industry ranking rules, Huawei is only one step away from Ericsson.

This time, Ericsson was overwhelmed by Huawei. According to reports, Huawei's corporate business revenue accounted for 7% of total revenue last year, consumer business accounted for 23%, becoming two growth points, and operator business accounted for 70%.

Ericsson CEO Wei Hansi said in a board meeting: "The company's fourth-quarter revenue is under some pressure. This is mainly because operators in the US and Japan have reduced their telecommunications infrastructure investment."

Up to now, among the top five telecom infrastructure providers in the world, Huawei, Ericsson, Nokia and Alang have disclosed their 2013 annual results. According to the exchange rate of December 31, 2013, the main business income was 39.33 billion US dollars, 35.3 billion US dollars, and 15.2 billion US dollars. Alang was dragged down by the mobile phone write-down and restructuring costs, and the net loss for the whole year of 2013 was 1.304 billion euros.

Increase the pace of transformation and improve operational efficiency

In the past few years, with the global economic situation continuing to slump and the growth of telecommunications infrastructure investment weak, the market space of telecom equipment vendors can be described as thin ice, while the two industry giants Ericsson and Huawei have embarked on two completely different transformation paths.

Ericsson believes that the operator market is far from reaching the ceiling, so the focus on the operator market can be seen. The telecom management service, the operation support system and the business support system OSS/BSS have been launched. The net sales of these two businesses in 2013. A total of 109.6 billion Swedish kronor, accounting for about 48% of the overall income; and restructuring the patent department, monetization of its intellectual property assets.

Huawei began its strategic transformation in 2010, and proposed a cloud computing solution that “cloud computing”: reshaping ICT, entering the enterprise network, and paying attention to the consumer market of mobile terminals (mobile phones, data cards, etc.). In 2011, Huawei launched a journey of transition to ICT integrated equipment manufacturers, trying to extend the competitive advantage of the telecommunications field to the corporate and consumer markets, and built a diversified industrial chain to guide the opportunities brought about by the company's business field. In 2013, Huawei blossomed in the enterprise-level market and initially built a complete enterprise-level product line. "In the data center, there are servers, storage, cloud computing, etc. In the enterprise network field, there are agile networks, agile switches, etc. In the UC field, there are telepresence, unified communications, and converged conferences.

On the terminal, Huawei did not fall. The glory of the brand is independent, and the transformation of the terminal business to the B2C business shows the inclusiveness of its corporate genes. Guo Xinxin, director of Huawei's terminal global delivery and services department, said: "Huawei terminals must be more proactive and open, and must learn to think in terms of consumers' thinking and must transform their services."

In addition, Huawei has increased its research and development of new technologies in recent years. It is understood that funds of more than 10% of sales revenue are used for innovation every year. In 2004-2013, Huawei invested a total of 153.9 billion yuan in research and development innovation. In 2013 alone, the company's R&D investment was as high as approximately RMB 33 billion, accounting for approximately 14% of sales revenue.

It can be seen that Huawei's profitability has been significantly improved after the transformation over the past few years. Meng Xiazhou said that by simplifying management and decentralizing the front line, the operational efficiency of the entire company has been improved.

4G is an important strategic opportunity

At the work meeting of the Ministry of Industry and Information Technology, Miao Wei, Minister of the Ministry of Industry and Information Technology, said that by the end of 2014, the number of domestic 4G commercial cities exceeded 300 and the number of users exceeded 30 million. This is even more mentioned that 4G is a major investment highlight for the communications industry in 2014, and investment in this area alone will reach 100 billion yuan. From 2009 to 2013, Huawei's main business profits in the past five years were 22.2 billion, 30.7 billion, 18.6 billion, 20 billion and 28-294 billion. The background of China's 3G profit in 2010 is the start of China's 3G. With the launch of China's 4G, telecom equipment makers' "harvest" next year is full of imagination.

In the most intimate 4G year, Huawei's 4G construction road has not fallen. Among the 244 commercial LTE networks in the world, Huawei has deployed 110 commercial networks. Huawei LTE has entered more than 100 capital cities and nine financial centers around the world. In addition, Huawei has won more than 200 4G commercial cooperation in the world, ranking first in the industry. In the terminal field, Huawei has released the world's first LTE multimode data card and the earliest mobile phone supporting LTE Cat4 (downlink rate 150Mbps).

Huawei China's terminal vice president and CMO said that if the 1G era is Motorola's world, the 2G era is the era of Nokia, the 3G era is the era of Apple and Samsung, then the 4G era must be Huawei's world. For Huawei's future, Meng Zhouzhou believes that the Internet of Things and cloud computing will bring more space to the telecom industry. Whether it is the traditional carrier business or Huawei's business and consumer business that has been focused on since the previous year. , all have broad room for growth.

However, in the era of mobile Internet, Huawei's revenue and profits are embarrassing, but more and more people are not optimistic about Huawei. They believe that "Lianpeng is old and Huawei is dead."

In fact, whether it is optimistic or declining, for the 4G first year of Baihua's contending, what Huawei can do is to further diversify its terminal, equipment and operators, and insist on embracing the change and seek common ground while reserving differences. I believe that in the future, Huawei will give us Present more unexpected surprises.

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