The network equipment and services sector is slowly taking pace across the world. In an era of a connected world and the new boom of Internet of Things (IoT), the growth is predictable and evident. More companies are effortlessly entering the space. Validating their revenue scoreboard shows a mixed result of success. Among them, one player that keep its scoreboard leveled is Huawei Technologies Co. Ltd. Compare Huawei with its other competitors — Ericsson AB, Nokia Corp, Cisco Systems, and ZTE – there is a stability in its growth.
In the first half of 2016, Huawei made 40% increase in the revenue, taking the toll to RMB245.5 billion ($36.7 billion) compared to RMB175.9 billion ($26.3 billion) in the first half of 2015. During the same period, Ericsson has reported a 7% decline registering 106.3 billion Swedish kronor ($12.7 billion) in revenue. Nokia too suffered a 10% loss in the period, making a revenue of €12.3 billion ($12.8 billion). Its network business fell 10% to €10.4 billion ($11.8 billion). ZTE’s operating revenue rose by 4.1% in the first six months, to 47.8 billion Chinese yuan ($7.2 billion), compared with the year-earlier period, while net profit was up 9.3%, to around RMB1.8 billion ($270 million). By generating $24.7 billion in sales over its February-to-July 2016 period, Cisco made 1.6% increase than the previous year.
The revenues of these companies also involve consumer-devices, hence they are not exactly comparable to each other. However, these companies bag a stake in communications service provider market.
Ericsson blamed the lower revenues for the first half of 2016 to the decline of licensing and a higher share of services sales. The company already goes through a tough time with its allegations of corruption in China and the problems related with its CEO Hans Vestberg. Cisco, on the other hand, displayed growth in security, data center switching, collaboration, and services, besides the software and subscription revenue. The cloud is assisting its growth in Cisco’s software-defined networking business, the Application Centric Infrastructure.
ZTE reported an increase in sales at its carriers’ networks division, revenues from the government and corporate business, and the devices business. The company also attributed its growth to the rising popularity of cloud computing and big data services, video and IoT services.
Interestingly, Huawei has not provided any further details about its financial performance so far this year. Instead, the company said that it managed a “steady growth” across all three of its business groups — Carrier, Enterprise and Consumer (devices). Among its businesses, the enterprise business is still in its infancy. In 2015, the revenue of enterprise business of Huawei was $4.3 billion. Carrier business showed a matured growth in 2015, generating sales of about $36 billion. Consumer business is the segment where the company reported an impressive growth, registering device sales by nearly 73% to about $20 billion in 2015.
According to Sabrina Cheng, Huawei’s chief financial officer, “We achieved steady growth across all three of our business groups, thanks to a well-balanced global presence and an unwavering focus on our pipe strategy. We are confident that Huawei will maintain its current momentum.”
As Cheng said, if the momentum of growth sustains for Huawei in the upcoming period, it’s definite that the company is going to score way high than its competitors.