07/20/2020

Yu Chengdong: The inventory backlog is a rumor, Huawei’s full-scene experience far exceeds Apple
On the morning of April 9th, the day after the spring new product launch event, Yu Chengdong, CEO of Huawei ‘s consumer business, attended a media communication meeting and received a large number of media interviews including Sauna.com to address many of Huawei ‘s recent hot topics.Yu Chengdong revealed that despite the impact of the epidemic, the revenue of Huawei ‘s consumer business continued to grow in the first quarter of this year, especially the demand for products related to remote office and online education. Huawei ‘s PC and tablet sales increased by more than 100%.Regarding this year’s performance expectations, Yu Chengdong believes that the expected decline in consumer business will not decrease, and revenue will continue to grow.He analyzed that Huawei will definitely maintain good growth in the Chinese market this year. The simultaneous decline in overseas markets in the first half of the year is inevitable because the first half of last year has not been affected by the “entity list”. He believes that through the development of HMS, this yearThe second half will be fine.Q1 revenue maintains growth, and gradually predicts that shipments will not decline. The original market expected that 5G will promote the replacement wave this year, thereby driving the global mobile phone market to return to the growth track. However, under the influence of the new coronary pneumonia epidemic, the global mobile phone market has been replacedThe outstanding downward adjustment has no way to estimate the impact on the head manufacturers.CICC predicts that the global mobile phone implantation volume in Q1 will be extended by at least 10% -15% this year, the decline in the second quarter will be as high as 26%, and then the decline in the third quarter will be narrowed to 5.6%, and the growth rate turned positive in the fourth quarter.However, Huawei’s consumer business withstood the impact of the epidemic in Q1.Yu Chengdong revealed that due to the rapid recovery of the Chinese market, Huawei ‘s sales recovered quickly at the end of February and early March, and the company can achieve a large increase in 3 months.Therefore, there was even a decrease in February, but he said that the growth in January and March increased this loss, so that there was a good growth in the first quarter.According to the release time of last year’s quarterly report, Huawei is expected to announce the results of the first quarter of this year around April 22, when the new coronary pneumonia epidemic will affect Huawei.Consumer business is already the most important part of Huawei’s revenue.According to Huawei’s 2019 annual report, the revenue share of the consumer business has risen to 54.4%, more than the sum of operators’ business and enterprise services, and the growth rate is as high as 34%, much higher than Huawei 19.1% overall growth rate.At the communication meeting, Yu Chengdong rebuked the rumors that Huawei’s mobile phone inventory was overstocked, and said that Huawei’s inventory was actually seriously out of stock.”The Spring Festival came early this year, and the workers had to take vacations. They had to prepare the goods before the Spring Festival. As a result, they were sold quickly. After the Spring Festival, they could not produce any more, so they were out of stock.I can’t wait to have inventory, and we will make money if there is inventory.”According to CICC’s forecast, Huawei’s mobile phone bookings will drop by 10% this year.Yu Chengdong said that although the overall market size has declined, Huawei does not expect it to decrease; Huawei continues to grow in China and is expected to decline overseas.”During the epidemic, we hope that the rate of decline will be a little slower than that of friendly businessmen. This is our goal.”The Internet of Things supports the consumer business in addition to the P40 series. At this new product launch, Huawei also launched a series of new Internet of Things products, including Dada 2.50,000 yuan smart screen X65.Huawei formally proposed the “1 + 8 + N” full-scenario strategy last year, extending the consumer business landscape from mobile phones to the Internet of Things, such as the introduction of smart screen series and the Hongmeng system applicable to the Internet of Things scenario.Yu Chengdong said that in the total sales of Huawei, the ratio of mobile phones to other IoT categories is close to 1: 1, which means that the replacement of Huawei IoT products will also reach the scale of 200 million to 300 million units.Huawei ‘s smartphone shipments reached 2 last year.400 million units, surpassing Apple to become the second largest mobile phone manufacturer in the world, but the growth rate of expansion dropped to 16.5%, while PC and smart wearable device shipments increased by 200% and 170%, respectively.Thanks to the increased demand for remote office and online education during the new coronary pneumonia epidemic, sales of these IoT categories also performed prominently.Yu Chengdong revealed that Huawei ‘s PCs and tablets have a 100% growth. The smart screen has had an impact due to the inability to install it on site. Now, after the on-site installation is resumed, sales have also increased significantly.”Apple wants to build its own ecology, but Huawei’s full-scenario experience is far more than Apple’s.”Yu Chengdong said that Huawei’s mobile phones and all devices can work together, and smart homes also have the most extensive support in the world. In the future, Huawei HiLink will become the world’s strongest standard.”According to Huawei ‘s annual report, Huawei ‘s HiLink platform accumulated more than 50 million users last year, and the total transmission volume of IoT connected devices exceeded 1.5 billion.Since the localization of the supply chain was accelerated in May last year, it was included in the “entity list” by the US government. Huawei began to move towards localization of the supply chain.Huawei ‘s rotating chairman Xu Zhijun said at the 2019 annual report press conference that last year the company expanded its R & D efforts to “fill holes”, and at the same time a large number of suppliers suddenly could not supply Huawei, and Huawei wanted to restructure the company ‘s supply chain.Yu Chengdong said that at present, Huawei’s components are both made in Japan and South Korea, the United States and other places, but he focuses on the company can not apply U.S. components, because Huawei has already done a complete replacement.”But we still keep some American parts, because past partners have given us a lot of support and help.”He believes that the United States wants to further upgrade Huawei’s chip supply restrictions, which will cause great damage to the global semiconductor industry.In Huawei’s mobile phone supply chain, Google’s GMS (Google Mobile Service) is undoubtedly the most important part.After GMS is unavailable, Huawei launched HMS (Huawei Mobile Service) as an alternative to reduce the impact of Huawei mobile phones in overseas markets.Xu Zhijun revealed that last year ‘s overseas revenue of consumer business was affected by at least 10 billion US dollars, and GMS could not be used at all. The sales of smartphones in overseas markets even improved in the fourth quarter.Yu Chengdong believes that currently HMS4.The progress of 0 is very good, the user experience improves very quickly, and even builds a leading advantage in certain fields. At present, Huawei’s P40 series and Mate30 Pro have all applied HMS, and the progress has exceeded the company’s expectations.Large brokerage companies all pointed out in the research report that the risk of chip disconnection will accelerate Huawei’s cultivation of independent third-party suppliers other than HiSilicon, which will help accelerate the development of domestic semiconductor companies.New Times Securities believes that the spread of the New Coronary Pneumonia epidemic overseas will intensify in the short term and will affect terminal sales. In the medium and long term, it will not change the industry development trend. 2020 will still be a big year for 5G replacements. The domestic replacement of the core supply chain is the trend.Sauna, Yenet Lu editor Yue Caizhou proofreading Xue Jingning