Huawei Returns to Growth Track: Smartphone Business Recovers Fully, Automotive Business Emerges Strongly

Tech 2024-08-31 22:44:17 Source: Network

Huawei Returns to Growth Track: Smartphone Business Recovers Fully, Automotive Business Emerges StronglyHuawei is emerging from its performance slump. On August 30, Huawei Investment Holding Co

Huawei Returns to Growth Track: Smartphone Business Recovers Fully, Automotive Business Emerges Strongly

Huawei is emerging from its performance slump. On August 30, Huawei Investment Holding Co., Ltd. (hereinafter referred to as "Huawei") released its 2024 semi-annual report, showing revenue of 410.823 billion yuan for the first six months of the year, a 33% increase from the same period last year's 308.290 billion yuan. The company's revenue grew by over 100 billion yuan in the first half of the year, while its net profit reached 54.865 billion yuan, up 18% year-on-year from the 46.523 billion yuan recorded in the same period last year.

Notably, according to the semi-annual report, Huawei invested 88.909 billion yuan in research and development in the first half of the year, an 8% increase from the 82.604 billion yuan invested in the same period last year. Research and development expenditure accounts for a remarkable 22% of total revenue. The day before, Huawei simply announced its operating data on its official website, stating that the company achieved sales revenue of 417.5 billion yuan in the first half of the year, a year-on-year increase of 34.3%, with a net profit margin of 13.2%.

Regarding the company's performance in the first half of the year, Xu Zhijun, Huawei's rotating chairman, commented, "The overall business performance of the Group is in line with expectations. We will implement the company's 'high-quality' strategy throughout the entire process, continuously optimize the industrial portfolio, enhance development resilience, build a thriving industrial ecosystem, and contribute to customers with more competitive products and solutions."

The semi-annual report reveals that in the first six months, Huawei received approximately 427.566 billion yuan in cash from sales of goods and provision of services, a significant increase of 106.912 billion yuan compared to the 320.654 billion yuan recorded in the same period last year. Behind this growth lies the full recovery of Huawei's smartphone business and the surge in smart car sales.

Smartphone Business: Continued Momentum in the High-End Market, Reclaiming Market Share

Since last September, Huawei has successively launched multiple new products, including the Mate60 series, MateX5, Pocket2, Pura70 series, and novaFlip, continuously enriching its product portfolio. IDC data shows that in the first half of 2024, Huawei once again became the top smartphone vendor in the Chinese market with a 17.5% market share.

Huawei Returns to Growth Track: Smartphone Business Recovers Fully, Automotive Business Emerges Strongly

Despite ongoing external restrictions, Huawei's supply capabilities have steadily improved, narrowing the gap with Apple in the market above 4,000 yuan. Furthermore, according to TechInsights' report, Huawei's global smartphone shipments grew by 49% year-on-year in the second quarter of 2024, reaching 11.6 million units. Due to the significant proportion of high-end models (combining the Mate and Pura series), its average selling price (ASP) and wholesale revenue have reached historical highs.

In the second half of the year, Huawei's Mate70 will go head-to-head with Apple's iPhone 16 in the high-end market. Additionally, Yu Chengdong, executive director of Huawei, chairman of the Terminal BG, and chairman of the Intelligent Automotive Solutions BU, revealed that Huawei will launch a foldable smartphone that "everyone can think of, but no one can make." Huawei has been conceptualizing this foldable phone for five years, and after overcoming a series of technical challenges, it is about to enter mass production. Regarding this new foldable smartphone, the outside world generally speculates that it will be a tri-fold device.

TechInsights predicts that Huawei's smartphone shipments in China will exceed 50 million units in 2024, significantly increasing its market share from 12% in 2023 to 19% in 2024, regaining the top spot in the Chinese market.

Automotive Business: Multi-Mode Collaboration Takes Root, Leading to the Rise of Yinwang

Huawei's automotive business is primarily divided into two parts: the Intelligent Automotive Solutions BU (hereinafter referred to as "Car BU") and the Huawei Terminal BG Smart Car Selection Business Department. Currently, Huawei's collaborations with automakers are unfolding along three paths:

In addition to the vertical component model, there is the HuaweiInside (HI) model, which provides full-stack intelligent vehicle solutions to automakers.

Huawei Returns to Growth Track: Smartphone Business Recovers Fully, Automotive Business Emerges Strongly

There is also the Smart Car Selection model, where Huawei deeply participates in various aspects of product definition, styling design, marketing, and user experience. This model was renamed HarmonyOS Zhixing (HarmonyOS Smart Travel) last November.

Among these, the HI model partner is Changan Automobile's Avatr. However, Yu Chengdong revealed that in the future, Deep Blue, Lantu, and MENGSHI will also adopt similar partnerships. The Smart Car Selection model partners include Seres, Chery, BAIC, and JAC.

Data shows that in the first half of 2024, HarmonyOS Zhixing accumulated 194,200 deliveries. Among them, the AITO M9, with a starting price of nearly 500,000 yuan, was launched at the end of last year and officially began deliveries at the end of February this year. As of the end of June, the AITO M9 has received over 100,000 pre-orders.

Furthermore, from May to July, Huawei transferred the trademarks of the three brands, AITO, Zhijie, and AITO, to its partner automakers. Among them, the AITO trademark has the highest value, with an appraisal company valuing it at 10.2 billion yuan. Ultimately, Seres acquired it for 2.5 billion yuan.

However, Huawei's Smart Car Selection model has often caused concern among automotive industry leaders, as Huawei's high level of involvement raises questions about whether automakers will lose their own soul. In this context, Shenzhen Yinwang Intelligent Technology Co., Ltd. (hereinafter referred to as "Yinwang") was registered and established. In January of this year, Huawei spun off its Car BU to form a new company, Yinwang, which inherited the technology and resources of Huawei's Car BU.

Yinwang is considered the new entity of Huawei's Car BU. Huawei hopes to tie the knot with car companies and sell part of its Car BU's equity, with Huawei participating through technology investment. In August, Avatr and Seres invested in Yinwang. According to the announcement information, both automakers hold a 10% stake, with a transaction amount of 11.5 billion yuan each. This means that Huawei's Car BU will welcome a substantial inflow of funds in the second half of the year.

Huawei Returns to Growth Track: Smartphone Business Recovers Fully, Automotive Business Emerges Strongly

Even more gratifying, according to disclosure, Yinwang's revenue for 2022, 2023, and the first half of 2024 was 2.098 billion yuan, 4.7 billion yuan, and 10.435 billion yuan, respectively. Its net profit attributable to shareholders of the company was -7.587 billion yuan, -5.597 billion yuan, and 2.231 billion yuan, respectively. Yinwang's turnaround in performance signifies that the Car BU is becoming a significant source of revenue and profit for Huawei.

Huawei's Promising Future: Targeting 800 Billion Yuan, Continued Breakthroughs in New Business

The 2023 annual report shows that Huawei achieved sales revenue of 704.2 billion yuan last year. According to media reports, Huawei's revenue target for this year is over 800 billion yuan. Judging from its performance in the first half of the year, achieving this goal may not be difficult.

Huawei's strong return in the smartphone and automotive fields demonstrates its powerful capabilities in technological innovation and market development. In the future, Huawei will continue to adhere to the "high-quality" development strategy, continuously optimize its industrial portfolio, and through sustained investment in research and development, provide customers with more competitive products and solutions.

Beyond the smartphone and automotive businesses, Huawei will continue to make efforts in other areas, such as cloud computing, artificial intelligence, and the Internet of Things. Huawei will adopt an open approach and collaborate with partners to build a thriving industrial ecosystem, supporting the digital transformation of various industries and embracing future challenges.

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