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Huawei profits up 33 percent despite increased scrutiny

updated 05:56 am EST, Mon January 21, 2013

Overall Huawei revenue rise claimed due to research efforts

Phone manufacturer Huawei has revealed it has increased its year-on-year net profits by 33 percent in 2012. Profit levels rose to 15.4 billion yuan ($2.5 billion) from the 11.6 billion yuan ($1.9 billion) earned in 2011, and the company expects it to grow stronger thanks to the growing mobile and cloud computing markets.

Overall revenues rose 8 percent to 220.2 billion yuan ($35.4 billion), with roughly 70-percent consisting of revenues from 45 of the world's top 50 telecommunications operators. Two thirds of revenues stemmed from markets outside of China, 31.8 billion yuan ($5.1 billion) of which came from the Americas, while China itself earned the company 73.6 billion yuan ($11.8 billion). Chief financial officer of Huawei, Cathy Meng, suggested to Reuters that its overall revenue could grow in 2013 by between 10 and 12 percent.

Research and development has cost the company 120 billion yuan ($19.2 billion) over the last 10 years, with the 29.9 billion ($4.8 billion) spent in 2012 said to account for more than 13-percent of the year's revenues. Announcements for further research in 2012 includes a $93 million research facility in Helsinki, Finland; residing just 13 miles away from Nokia's headquarters, with an emphasis on optimizing the user experience in Windows Phone 8 and Android, as well as working on "new technologies for mobile devices."

The profits and revenue increases of Huawei run counter to the regulatory scrutiny that various governments have placed the phone maker under, something that forced the Chinese government to step in and defend the company. In late December, it was reported that Huawei offered to sell embargoed computer equipment to an Iran-based mobile phone operator in 2010, at a time when Iran is covered by a ban on certain technologies being sold to it, due to the belief by US officials that the country is developing its own nuclear weapons.



By Electronista Staff
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