Higher-end phones help Huawei rake in the cash

Huawei's phone business is focused on making a profit, and not just shipping large volumes

A Huawei store in Shenzhen, China.

A Huawei store in Shenzhen, China.

Huawei Technologies' shift to selling high-end smartphones is paying off. The more expensive devices helped almost double the company's handset revenue in this year's first half.

Although Chinese brands have a reputation of selling cheap, low-end products, Huawei is out to make itself into a top provider of premium phones.

On Wednesday, it revealed some of that progress, noting revenue from its handset business totalled US$7.23 billion over the previous six months, up 87 per cent year on year.

Huawei is seeing the average selling price of its phones rise at the same time as demand goes up: Its smartphone shipments during the period rose 39 per cent on a year earlier.

Given that Huawei's home market of China is already rife with competition, and showing signs of slowing growth, the sales data is a good indicator that the company's product strategy is working.

In April, Huawei's acting CEO said it wanted to make a substantial profit from phones, and not simply sell them in huge volumes.

Although Huawei's primary business has been in networking gear, the company is focused on smartphones as well. Stumbling blocks include its lack of brand recognition, and controversy surrounding its ties to the Chinese government. But over the years, the company has been investing in more marketing, and developing cutting edge phones that are meant to impress.

On Wednesday, Huawei added that in this year's first half, unit sales of its mid-market and high-end phones grew 70 per cent year over year. Unit sales are also growing at over 40 per cent in regions including Europe and the Middle East.

Overall, Huawei's sale revenue for its entire business in the first six months reached almost $29 billion, for a year-over-year increase of 30 percent.

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Michael Kan

IDG News Service
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