Huawei Technologies, China’s largest smartphone and telecommunications manufacturer, said today sales in the first six months of 2016 soared by 40 percent from a year earlier to 245.5 billion yuan, or USD 36.6 billion.
The world’s No. 3 smartphone vendor is narrowing the gap between itself and the industry’s current leaders Samsung and Apple. Huawei’s global market share measured by volume was 8.2 percent in the first quarter, an increase from 5.2 percent a year earlier, according to research firm IDC. Samsung’s meanwhile was little changed at 24.5 percent while Apple’s share declined to 15.3 percent from 18.3 percent.
“Joining the top tier alongside Apple and Samsung is a result of clear and perhaps an aggressive strategy,” said Kamel Mellahi, a professor of strategy management at Warwick Business School in a statement. “Huawei (has) quickly moved up the value chain, from producing low cost product(s) to providing higher-end and more sophisticated products. Like many high tech Chinese firms, for the last few years Huawei has embarked on a massive investment in its R&D program and they now have world class internal innovative capabilities. “ Huawei just last week reached an industrial Internet cooperation agreement with GE.
Huawei, led by billionaire Ren Zhengfei, attributed its revenue gains to better smartphone and enterprise business, and said its operating margin in the first half was 12 percent. The company didn’t provide a net profit figure. Whereas Huawei’s first half revenue grew, Apple’s sales in its second quarter fell to USD 50.6 billion from USD 58 billion amid what CEO Tim Cook called “strong macroeconomic headwinds.”
Though Huawei benefits from a hometown presence in China, the world’s largest market for smartphones, it needs to address challenges overseas where it is “facing a number of obstacles to enter some key markets such as the U.S. and Australia. For continued success Huawei must find a way to crack those markets, especially the U.S.,” Mellahi said. - Forbes