UN Huawei must be given equal opportunity to bid for 5G business | total telecom – Houlin Zhao, secretary general of the International Telecommunications Union, told reporters from Reuters that 5G security remained of paramount importance but that there was no evidence to suggest that the use of Huawei’s network equipment should be restricted – the hasn’t read the UK government report on Huawei security flaws – the coincidence that Mr Zhao is Chinese is overlooked in the article. This also ignores issues around Huawei software engineering across its product range of network equipment with extensive backdoors built in that Huawei refuses to remove. The UN Huawei statement highlights the declining trust in UN bodies that have undergone state capture by China. More related content here.
Apple’s Computer Vision Team is working on using Depth-based Touch Detection for Games & Virtual Keyboards – Patently Apple – depth based touch detection is important beyond the Minority Report style virtual keyboard interface. It could allow Apple engineers to design completely new ways of processing locative and contextual information mapped on the real world. It also means that we’re likely to be doing embarrassing gestures in the future. We will be closer to the idea of a web-of-no-web where the boundaries between the real world and the digital world are blurred and in some cases merged.
Burger King under fire for ‘racist’ Vietnamese chopsticks ad | The Drum – really surprised Burger King made this mistake so close after the Dolce & Gabbana China debacle. One key consideration is that Yum Brands China that owns Burger King and KFC in China is a completely separate business. So Burger King might not be a truly global learning organisation. This happened in one of Burger King’s smallest markets – New Zealand is which is probably why it managed to sail under the radar of global brand vetting until it was too late.
The Equality of Opportunity Project – This introductory course, taught by Raj Chetty, shows how “big data” can be used to understand and solve some of the most important social and economic problems of our time
Will Imagination Deals Deliver MIPS to China? | EE Times – interesting discussions on the Tallwood VC / Canyon Bridge deal and possible implications for the MIPS eco-system. Interesting that China sees more potential and security in MIPS than ARM….
Huawei expansion into smartphone market has started to be reflected int their released their annual results for 2015 last week. By going through their press release library and annual reports I have tried to piece together a picture of their consumer business and how it has grown over time.
Huawei isn’t like other businesses you might be used to in terms of corporate structure. It is based around worker participation in profits with Chinese colleagues benefiting from profit share. It is a private company so it’s numbers don’t have the same level of disclosure requirements as public companies. It’s books are audited by a reputable accounting firm.
I found some inconsistencies in the way information is disclosed. For a number of years Huawei used to quote US dollar equivalents to its numbers, but has stopped doing so in the 2015 report.
Other inconsistencies:
High-end device sales are only listed for the past three years as the company started to focus on the premium marketplace
Honor sub-brand device shipments were disclosed for 2014 and 2015 as the brand filled the low-to-mid market segments Huawei’s range had previously extended down to
I only have two years worth of revenue numbers from Western Europe, if I get more I can then start looking at trends over time
In 2014, they disclosed the proportion of sales from e-commerce and the number of Huawei branded stores. In 2015, they disclosed the total number of retail outlets worldwide that sold Huawei phones
Between the currency fluctuations and the slight changes in information there may be some errors in my numbers – please bare this in mind.
I have outlined my charts below as JPEGs and have embedded a presentation at the bottom for convenience.
What does 2016 and beyond bring?
Looking at forecasts from market analysts and The World Bank Huawei will experience tougher market conditions with lower growth forecast across major markets like China. Smartphone market maturity will mean lower exceptions of sector growth as well.
As a presentation
It is hard for anyone reading the media to believe that Huawei’s rise in the smartphone market was anything short of miraculous. In reality the roots of this rise go back at least six years. Back in 2010, Huawei was already shipping 3,000,000 smartphones. However since that time, the year-on-year percentage growth in consumer devices shipped by the company reduced from 82 per cent year-on-year growth to about 8 per cent growth in 2014. This growth was initially driven by less sexy products like feature phones for China Mobile, DSL routers and 3G/LTE dongles.
In fact if we go back further to 2007, feature phones drove a 757 per cent growth in consumer devices shipped.
2010 is quite crucial, Huawei Consumer Devices suffered a 32 drop in year-on-year growth in revenue / device going from $56 per device in 2009 to $38 in 2010. The margins per device then began to climb again during period from 2010 – 2014.
January’s numbers discussed at CES don’t give us the total numbers of devices shipped by Huawei, but only smartphone numbers, so I haven’t calculated revenues for 2015, but they would represent a significant upswing from the 20+% growth enjoyed in previous years.
Reading the Huawei coverage one would believe that the growth is being driven by developed markets and premium devices, but the truth according to the numbers found seem to be less clear. In between the years 2014 and 2015, the percentage revenue derived from Western Europe dropped from 11.3% to 10%, even as overall revenues grew. Much of this is driven by Southern European markets that had been hit hardest during the 2008 recession. It will be interesting to see how Huawei looks to crack Germany, the UK, France and the US.
So what does this all mean?
Huawei smartphones and watches are firstly just the most visible aspect of the company and not likely even the most profitable. Huawei equipment likely runs at least part of the internet network that brought you this page. They power mobile networks around the world (outside the US). They provide storage (very large boxes of hard disks) to banks and businesses around the world.
Huawei Consumer Device numbers are reflective of wider technological change. In the space of the nine years that I looked, you could see the peak of the feature phone business, where Huawei was predominantly a domestic supplier. The rise of the mobile dongle to fill the gaps in free wi-fi networks and the rise of the smartphone/phablet which negated some of the mobile working laptops did around email, but also acted as tethered modems reducing the need of dongles.
Huawei’s numbers are indicative of a successful fast follower strategy. Huawei learned the smartphone trade by first of all making badge engineered Android phones for T-Mobile. It then went out on its own. Each generation of phone improved in terms of industrial design and they built a direct to consumer channel over time.
Xiaomi’s direct-to-consumer e-commerce strategy was transformative in the Chinese market and something that Huawei replicated with the Honor brand. Huawei hasn’t tried to build services in the same way that Xiaomi has and hasn’t ventured as deeply into the smart home.
In terms of device numbers the company has successfully managed to displace both Samsung and Xiaomi in markets, but despite the ‘premium positioning’ it has taken a while to build the average revenue per device (ARPD). If the 20 billion dollar annual revenue announced at CES, only represents smartphone devices, then the ARPD (of $188) is still less than a third of what Apple enjoys with the iPhone.
The smartphone market like dongles and DSL modems before it is moving rapidly towards maturity and lower growth. It will be interesting to see where Huawei’s business strategy goes next.
How I got the data?
The data quoted is based on numbers given out in Huawei’s annual reports from 2006 – 2014 and the Huawei Consumer Device press room where Consumer Device started to break out some of their own numbers. The types of numbers talked about vary from year to year. You can see a copy of my collated and calculated numbers here. When converting CNY to US dollars, I assumed an exchange rate of 1 yuan is 15 cents.
Mico – A vibrant new way to talk with Copilot | Product Hunt – Strategy wise I have mixed feelings about it. People are already anthropomorphising LLMs and the full impact of that is still yet to be understood – I don’t think its universally good. However, we’ve already got there with Mico as a character. I imagine that fluent objects like Mico does make services stickier.
In this respect Mico looks like the kind of moral trap Meta, Bytedance have fallen into on their social media platforms.
Then there is the Clippy trauma now encapsulated as a drop of fleum – but that’s age bracketed so likely means nothing to younger cohorts.
On the other hand from a marketing effectiveness perspective, if Microsoft use Mico in brand advertising it might work well as a fluent object and boost their brand building performance. Reminded me a lot of British Gas’ Willo the Wisp character.
The 12th floor of 18 On Lan Street, a Ginza-style commercial building in Central, was handed over to Surplus Inc for HK$34 million (US$4.4 million) on Friday, according to Land Registry records. That represented a 65 per cent loss for the previous owner, Zhou Shubo, who bought the floor for HK$96 million in 2013.
Kanika Sam Ang was a director at Surplus, according to Companies Registry data. Sam Ang has been associated with the family of tycoon Tony Tandijono, who owns Cambodia-based President Airlines, Phnom Penh casino Holiday Palace and a travel agency in Hong Kong.
Gen Z Men So Scared of Getting Filmed They’ve Stopped Dating | Rolling Stone – It ends up fueling mistrust in many young men and can turn interactions into battlegrounds where boys feel they must protect their egos. Over time, empathy can go away and suspicion takes its place. Instead of feeling comfortable being genuine, sometimes they second-guess every word or message, wondering how it might be judged, shared, or mocked. But then it takes a turn and that’s why young men may retreat into online spaces that confirm the suspicions they have and help to reinforce negative stereotypes about girls. This causes a Cold War among genders where each side is suspicious of each other and doesn’t have empathy. In these divided spaces, interactions become games of defensive accusation and people grow untrustworthy of one another. – Failing is part of success and of life
Theft Bisect – via Matt Muir ‘This exists because, seemingly, the Met Police are too dumb to make this themselves’ – you can read an explanation as to the ‘why’ and the ‘how’ behind its existence here, but generally this is just a smart idea, simply-executed.‘
Chinese experts criticised the series of statements, saying they reflect some Australia politicians’ anxiety and bias toward China’s technological and military progress. Moreover, they said the spy chief’s remarks reveal an arrogance rooted in the belief that Western political system is superior – Global Times is a Chinese government published newspaper.
Software
ChatEurope – slow and would have been ok a few years ago
Nvidia faces Washington heat over alleged Huawei ties | DigiTimes – US lawmakers are ramping up scrutiny of China’s AI and semiconductor sectors, tightening oversight from corporate ties to capital flows to reinforce Washington’s edge in the global AI competition.
