Huawei Smartphone Shipments Grew by 40 Percent in 2014

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Huawei Technology Co Ltd’s smartphone shipments rose by more than 40 percent in 2014, according to an internal memo seen by Reuters, failing to match its own target and the performance of faster growing rivals such as Xiaomi Inc.

Although Huawei’s shipments reached 75 million, the figure came in below its previously stated sales target of 80 million units. The growth rate also fell from 67 percent in 2013, in stark contrast to Xiaomi, which overtook Samsung Electronics Incas the top vendor in China, the world’s biggest smartphone market, last quarter. Xiaomi is on track to triple its global 60 million shipments this year.

Nevertheless, Huawei’s smartphone revenues rose roughly 30 percent to more than $11.8 billion, according to the year-end memo to employees sent by Richard Yu, the head of Huawei’s consumer business.

Huawei spokeswoman Maggie Qi said on Wednesday the company does not comment on internal memos.

The results, which are due to be publicly announced in the coming weeks, reaffirms Huawei’s continued ascent in the global smartphone war but also the sharpening competition between a small group of contenders, including Xiaomi and LG Electronics, whose growth rates are eclipsing those of the industry’s leaders.

Pressured by low-cost vendors, top ranked Samsung Electronics Co is likely to see its shipments nearly unchanged this year, while second-ranked Apple Inc may have posted around 20 percent growth after launching the iPhone 6, analysts estimate.

Those growth rates, however, pale in comparison to the expansion of Xiaomi, which sold 26 million handsets during the first half of 2014.

If it reaches its sales target of 60 million for the year, Xiaomi will have more than tripled its 2013 sales of 18.7 million. Private investors believe it will continue to soar: the Beijing-based company announced this week a new round of equity financing at $45 billion valuation, making Xiaomi the most highly valued private technology company in the world.

Meanwhile, close rival LG Electronics Inc may have seen its smartphone shipments rise around 26 percent this year, according to analysts.

Trendforce analyst Alan Chen said in a research note this month that Huawei, Xiaomi and Lenovo Group Ltd, which recently purchased Motorola from Google in a $2.91 billion deal, will battle to be the top Chinese smartphone vendor in 2015.

“How Lenovo’s Motorola acquisition plays out and whether Xiaomi can replicate its home market success overseas will be key factors in determining who becomes the top Chinese brand in 2015,” Chen said.

© Thomson Reuters 2014

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