China-based Huawei Technologies posted earnings growth that was its slowest in the past five years, as the biggest telecommunications gear maker in China invested in research and a blitz in marketing to narrow the gap between it, Samsung and Apple in smartphones.
Huawei, the world's No. 3 smartphone maker behind Apple Inc (AAPL.O) and Samsung Electronics Co Ltd (005930.KS), said net profit rose to 37.1 billion yuan ($5.3 billion).
Thanks to its increasingly innovative products and growing global recognition as a premium device brand, Huawei's Consumer BG shipped 139 million smartphones during 2016, and reported CNY179.8 billion (US$25.9 billion) in annual revenue, up 44%.
It shipped 139 million phones previous year.
China's Huawei has confirmed that sales rose almost a third in 2016 buoyed by double-digit growth across its carrier, enterprise and handset businesses. That was its slowest pace of growth since a profit decline in 2011. The group annual revenue reached 521.6 billion yuan during the year, which is an increase of 32 per cent from 2015. Its profit margin fell to 7.1% from 9.3% in 2015. The company set up a global service centre in Bangalore past year.
Xu will be replaced by veteran Guo Ping from 1 April. On the other hand, Huawei has to compete with strong domestic rivals like Oppo in the smartphone segment, analysts said.
Huawei missed the top position in domestic smartphone shipments a year ago by a narrow margin, selling 76.6 million handsets.
Huawei spent 76.4 billion yuan on research and development in 2016, the first time for it to surpass the US$10-billion line, covering technologies from artificial intelligence, wireless technology to cloud computing.
Huawei has steadily increased its Ottawa presence in recent years, funded in part with millions of dollars in financial support from taxpayers.
Strong competition in China's smartphone market from previously little-known domestic rivals OPPO and Vivo cost Huawei its top spot as the biggest vendor in the domestic market past year.