Let’s recap Huawei’s spectacular 2016: The company shipped an impressive 140 million smartphones last year; its flagship P9 sold over 10 million units; it was right behind Apple in smartphone profits; and its third-place position in the global market was secured. And yet, the Chinese company made less money last year than in 2015. What?!
How in the world does a company sell so well but make less profit? In this case, Huawei spent a lot more on marketing its products and increased component prices than ever before. Those were all necessary expenses, of course, since the brand created such a strong presence outside of China last year.
Just look at who Huawei spent its fortunes on: Henry Cavill and Scarlett Johanssen helped push the popular P9 in the western hemisphere. This led to a $2 billion profit last year compared to the $2.2 billion made two years ago, despite a 30 percent increase in sales for 2016. The higher-ups were hoping for $2.5 billion; they ended up with 20 percent less than that.
With that, Huawei is hoping to lessen the overspending on extensive marketing and retail channels. If all goes well, the group could reach its intended goal of doubling 2016’s profits, hopefully making $4 billion this year.
So, if you notice less Huawei advertising in the next few months, remember it’s all part of the plan.