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34 Huawei Investment & Holding Co., Ltd. 2014 Annual Report
Consumer Business
Crossing the 10-billion-dollar mark and enhancing
the competitiveness of core products
In 2014, our consumer business generated total
sales revenues of CNY75,100 million, an increase of
approximately 32.6% year-on-year. With a continued
rise in profitability, we exceeded our profit targets.
Among our revenues, 52% came from markets outside
of China. The market share of our handsets exceeded
5% in 11 key countries. Our shipments grew by 7.8%
to a total of 138 million units in 2014. Of the total
shipments, 75 million were smartphones, an increase
of 45% year-on-year.
After three years of growth, our consumer business
achieved several historic milestones:
■ In 2011, we moved away from manufacturing
white-label, low-end customized phones to
developing our own brand of mid-range and
high-end handsets.
■ In 2012, we transformed our brand, products, and
channels, and implemented the premium product
strategy by launching flagship phones, including the
D and P series.
■ In 2013, we built up our capabilities in the global
open market.
■ In 2014, the rapid development of 4G LTE and
our core patent advantages in 4G LTE presented
our consumer business with unprecedented
opportunities, yielding a bumper harvest of revenue
and profits.
We have made remarkable achievements in user
engagement and channel development. In 2014, we
strove to develop open channels and retail outlets. This
resulted in a significant growth in revenue contributions
from open channels (including e-commerce), which
accounted for 41% of the total revenue of the
Consumer BG. By the end of 2014, Huawei's Consumer
BG established 630 branded stores globally, greatly
expanding retail access and enhancing consumer
experience. We developed relationships with users
through the Huafan Club, and greatly improved the
usability and consistency of Emotion UI 3.0.
Consolidating the position of flagship phones in the
mid-range and high-end market and successfully
differentiating them from rival products
We continued to focus on the premium product
strategy. Our mid-range and high-end smartphones
accounted for 18% of our total smartphone shipments,
a significant increase, while 4G-enabled smartphones
exceeded 29% of the total smartphone shipments. In
the short space of just six months since their launches,
we shipped 4 million units of the Ascend P7 and 3
million of the Honor 6, two of Huawei's 2014 premium
flagship products. The Ascend Mate7 was a major hit
with business people in all markets, with over 2 million
units shipped within three months of its launch.
Over the past three years, our Consumer BG has taken
solid steps to develop its business and applied the latest
technological achievements to continuously build on its
advantages in style, industrial design, and architecture.
We have teamed up with partners across the supply
chain in innovation, and outpaced our competitors
by fully developing core competences for the long
term. Huawei's flagship phones have differentiated
themselves from the competition. Core competences
such as outstanding cameras, long battery life, strong
connectivity, and the great user experience offered by
the Emotion UI have been well received by consumers.