Huawei takes No. 2 slot, but giant Ericsson still ahead

16:48, April 01, 2010      

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Huawei Technologies posted strong performance last year, making it the world's second largest telecommunications equipment provider after Sweden's L.M. Ericsson Telephone by sales revenue and global market share.

In an annual report Wednesday, Huawei said its global sales revenue rose 19 percent to 149.06 billion yuan ($21.84 billion) in 2009 from 2008's 125.22 billion yuan ($18.35 billion).

The figure trails Ericsson's $28.5 billion, but surpasses the traditional second and third place market players, Nokia Siemens and Alcatel-Lucent.

Those firms saw sales revenue of 12.57 billion euros ($16.87 billion) and 15.16 billion euros ($20.34 billion), respectively.

Huawei earned a net profit of 18.27 billion yuan ($2.68 billion) last year, more than doubling its profit in 2008.

During the same period, when the worldwide market for carrier network infrastruc-ture shrank to $79 million from 2008's $93 million, the privately-owned company's global market share rose to 14.2 percent, just behind Ericsson's 20.8 percent, according to information technology research and advisory company Gartner Inc.

The company attributed its strong performance to rising sales, good cost control and exchange-rate gains.

Analysts say Huawei's input in R&D also helped the company outperform its peers.

Last year, Huawei spent 13.34 billion ($1.95 billion) yuan on R&D, 8.9 percent of its sales revenue.

Tina Tian, principal analyst with Gartner, told the Global Times that Huawei was not bolstered only it by its "low price" advantage, as its product quality is quite similar to quality levels among its Western rivals.

The company expects its revenue to grow 20 percent this year, with strong development of broadband.

Huawei is also the largest player in China's 3G market. It is the leading equipment provider to China Unicom's WCDMA and China Telecom's CDMA2000 EV-DO, and second highest provider to China Mobile's TD-SCDMA.

Tian said that the possibility exists for Huawei to replace Ericsson as the world's largest telecommunications equipment provider, though there is much space left for it to explore first.

"Huawei's product line is larger than that of Ericsson, but it is weak in providing professional services and consulting, from which Ericsson generates nearly half of its sales revenue," Tian said.

She added Huawei needs to strengthen its role in leading development trends to match Ericsson.

Source: Xinhua


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