Huawei sees 39 per cent drop in profits despite smartphone push

CHINESE TELECOMS EQUIPMENT VENDOR Huawei announced a 39 per cent drop in profits despite a steady increase in revenues.

Huawei reported its financial year 2011 results with revenues at $32.4bn, an increase of 11 per cent from 2010. Although the firm's revenues went in the right direction, profits fell off a cliff, dropping 52 per cent to $1.8bn.

According to the company the growth in revenue was due to its consumer and enterprise business units with the firm claiming it shipped 150 million 'smart devices' during 2011. Huawei also reported a 57.1 per cent increase in revenues from its enterprise business.

Ken Hu, rotating and acting CEO of Huawei said, "In 2011, Huawei increased its investment in the enterprise and consumer business segments, and achieved all-around growth on the back of strong business momentum generated by the company's successful transformation into a complete end-to-end ICT solutions provider. We have made strategic investments, augmented our R&D capabilities and deployed resources globally, and implemented a future-oriented business architecture that puts Huawei in a confident position for sustained growth."

Huawei's bread and butter telecoms equipment business has been suffering not due to competition but because of governments ruling the company cannot bid for contracts due to alleged ties with the Chinese military. The firm has also made a significant push into consumer electronics with a fast growing range of smartphones and tablets. µ