Bloomberg News

Huawei Adds New MediaPad Tablet in Growing Consumer Push

June 20, 2011

June 20 (Bloomberg) -- Huawei Technologies Co., China’s largest phone-network equipment maker, introduced its second line of tablet computers in eight months, as the company expands its push into consumer markets.

Huawei’s new MediaPad tablet with 7-inch screen will run Google Inc.’s Android Honeycomb 3.2 operating system, Victor Xu, chief marketing officer of the company’s device business unit, said at a press conference.

Chief Executive Officer Ren Zhengfei is broadening offerings of devices such as smartphones and tablet computers to maintain sales growth amid slower demand for its traditional phone-network gear. The thrust into consumer markets, along with a drive to expand business-computing services, aims to triple annual sales to about $100 billion in the next five to 10 years, Shenzhen-based Huawei said in April.

Apple Inc.’s iPad currently dominates the global tablet market. Competition from new entrants will cut Apple’s share of the market for the device to about 50 percent next year, from almost 100 percent when the Cupertino, California-based company began selling the iPad a year ago, IHS ISuppli said in April.

Huawei had introduced the 7-inch Ideos S7 running the Android system at a Beijing trade show in October. Huawei’s S7 tablet and an updated S7 Slim announced in February are already on sale in Europe and Asia.

The MediaPad will be sold globally and will have more than six hours of battery life, according to the statement. The device comes pre-installed with software to operate the social networking sites of Facebook Inc. and Twitter Inc., it said.

One Percent

Huawei captured 1 percent of global tablet shipments in the first quarter and the company will have to work to build brand awareness with tablet buyers, according to Neil Mawston, a London-based analyst at Strategy Analytics.

“Huawei’s portfolio of tablets is currently limited, distribution is modest, and despite having a strong global position in cellular laptop dongles, Huawei’s brand is not yet widely known among consumers for computing devices,” Mawston wrote in a June 17 e-mail.

Huawei in April forecast total sales this year will climb to 199 billion yuan ($31 billion) from 185.2 billion yuan last year. Still, sales growth this year will be less than half the 24 percent increase in revenue last year as the company faces challenges including yuan appreciation, a shortage of labor and accelerating inflation.

Sales of smartphones and other handheld devices may increase to $20 billion in the next five years, from $5 billion last year, the company said in April.

Huawei got 65 percent of its revenue from outside China last year, up from 60 percent in 2009, according to the company’s annual report. Overseas sales jumped 34 percent at Huawei to 120.4 billion yuan last year, according to the report.

Its sales in China gained 9.7 percent to 64.8 billion yuan. China accounted for 35 percent of the company’s sales last year, down from 40 percent in 2009. Net income rose 30 percent to 23.8 billion yuan, from 18.3 billion yuan a year earlier.

The company is entirely employee-owned and the Chinese government holds no shares, according to its website. The company employs 110,000 worldwide, the annual report said.

--Edmond Lococo, Ketaki Gokhale. Editors: Suresh Seshadri, Anand Krishnamoorthy.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net; Ketaki Gokhale in Mumbai at kgokhale@bloomberg.net.

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


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