One slight negative was declining profitability, with operating margin falling to 9.1% from 11.6% in 2015, but that’s still a lot better than its competitors and seems to be down to a combination of the lower-margin consumer group (smartphones) accounting for a larger proportion of revenues and continued heavy spend on R&D.
“In 2016, Huawei maintained its strategic focus and achieved solid growth,” said rotating CEO Eric Xu. “As humanity continues to explore and make new breakthroughs in the digital world, digitization and increasing intelligence present huge business opportunities for all industries, and are also paving the road for new growth for the ICT industry. We will stay customer-centric and will support digital transformation in all industries, in order to create value for our customers and to grow sustainably.”
“Huawei was operationally healthy in 2016, with ample cash reserves, a solid and sustainable capital structure, and high resilience against risk,” gloated Huawei CFO Sabrina Meng. “In 2017, we will continue to boost the efficiency and quality of our operations to ensure solid growth.”
We decided to let the numbers speak for themselves, so have reproduced the key tables below, together with the 2016 numbers for Nokia and Ericsson. Suffice it to say Huawei is kicking ass right now and seems determined to perpetuate that state of affairs. In other news its time for the rotating CEO shuffle, with Guo Ping getting his turn in the hot-seat again, having previously done so for six months from October 2015.
With Amazon and Google launching smart home initiatives, have the telcos missed out on their chance to cash in on this market?
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