Some time ago, Huawei released its 2021 financial report data, from the perspective of revenue, the decline is still relatively much, from 891.4 billion in 2020, directly down to 634 billion, almost the level of 2017.
In fact, we are not surprised by such a result, because for well-known reasons, Huawei's smartphone sales have declined seriously, and through Huawei's annual reports over the years, it can be seen that the consumer business to which smart phones belong has always been the main contributor to revenue, basically at the level of 50%.
However, Huawei still has good news, for example, some time ago, the former British Minister of Commerce said that the United Kingdom's rejection of Huawei 5G has nothing to do with the so-called national security, and is forced by US pressure.
There is no doubt that such a blockbuster news not only broke the rumors created by the United States all along, but also returned Huawei's innocence.
However, we know that Huawei still has not reached an easy moment, and Huawei itself said that it is still in a difficult period.
This is also easy to understand, because the problems in chip manufacturing have not been solved, but we still see Huawei trying to gain the initiative in more tracks.
Just today, Huawei Yu Chengdong officially announced that at this year's MWC Mobile World Congress, there will be a smart office conference, which will be fixed on February 27.
This is very unusual.
Presumably some friends know that in addition to Huawei's consumer business, there are two other major services, namely carrier business and enterprise business.
If you pay attention to Huawei's annual report data in recent years, you will find that Huawei's revenue growth mainly depends on consumer business and enterprise business, and the growth rate of operator business is very small.
For example, in 2017, Huawei's carrier business revenue was 297.8 billion, while three years later, in 2020, its revenue was 302.6 billion, which can be said to have changed little.
But comparing the consumer business and the enterprise business, the revenue figures of these two in 2017 and 2020 were 237.8 billion to 482.9 billion and 54.9 billion to 100.3 billion, respectively.
It can be seen that the revenue of consumer business and enterprise business has almost doubled.
At this point, a more critical set of data should appear, above we mentioned that Huawei's revenue in 2021 is 634 billion, down more than 200 billion, but according to the news disclosed by the media, Huawei's net profit is about 64 billion.
What is this concept, to know that Huawei's revenue in 2020 is 891.4 billion, and the net profit is only 64.6 billion.
That is to say, although Huawei's revenue fell by about 30%, but the net profit can be said to have hardly declined, what is going on?
The answer is Huawei's enterprise business.
As we mentioned above, at this year's MWC conference, Huawei will hold a smart office conference, which is actually part of Huawei's enterprise business.
If you understand Huawei's participation in MWC in the past, you will know that Huawei's main sharing content is generally consumer business and carrier business, and rarely involves enterprise business.
But this year is different, which may be explained by a sentence by Huawei Chairman Guo Ping, who said: In the past year (referring to 2021), Huawei's operator business performance has been stable, the enterprise business has grown healthily, and the terminal business has developed rapidly in new industries.
It can be seen that the performance of the operator's business is stable, and we also mentioned above that the revenue has basically not changed; and the consumer business, that is, the terminal business that Guo Ping said, is the development of new industries, such as Hongmeng; only the enterprise business is growing, and it is healthy growth.
Obviously, although Huawei's revenue in 2021 has declined, but the net profit has hardly declined, to know that Huawei's revenue in 2019 is 858.8 billion, but the net profit is only 62.7 billion, not more than 2021.
Obviously, in the case of the operator's business remaining almost unchanged, it is the enterprise business that has begun to exert its strength.
According to Huawei's 2020 annual report, the growth rate of consumer business is 3.3%, the growth rate of operator business is only 0.2%, and the growth rate of enterprise business is 23%, which is very unusual.
Some people say that Huawei's enterprise business accounts for the smallest share of revenue.
This is true, but for enterprises, the amount of revenue is not the most important, more important is the profit.
Above we talked about that Huawei's revenue decline is caused by the decline in smartphone sales, but the profit of the smart phone business is actually not high, according to the data released by Counterpoint Research in the fourth quarter of 2020, Apple alone took about 80% of the market profit.
Of course, this is mainly because Huawei's sales have been affected, but even in 2019, Apple's market profit is close to 70%, and according to the data of Counterpoint in the following figure, Huawei's market net profit of its smartphone business before 2020 is only about 10%, and in most cases it is only single digits.
The total net profit of smart phones in the global market is only about 50 billion US dollars, even according to Huawei's highest market proportion of 10%, there is only about 5 billion US dollars of net profit, almost 31.5 billion yuan, considering that in most cases its proportion is single digits, so the net profit brought by smart phones is mainly below 30 billion.
So after such an analysis, it is better to understand why Huawei's revenue has declined, but the net profit has fallen very little, on the one hand, because the net profit brought by the smart phone business itself is not much, on the other hand, the enterprise business has begun to exert force.
Unlike the smartphone business, the net profit level of the enterprise business is higher.
As we mentioned above, Guo Ping said that the healthy development of enterprise business and the operator business are still stable as before, so we can see through calculations that Huawei's net profit margin in 2020 is about 7%, but about 10% in 2021.
While the operator's business is still stable, the smartphone business has caused a sharp decline in revenue, but the net profit has hardly moved, and it is clear that the high profit margin of the enterprise business has played a supporting role.
Huawei's enterprise business actually has a lot, in view of the length, we will not introduce them one by one, but only need to come up with a business, you can explain the problem, such as its consulting and planning business.
The business segment consists of two segments, namely business consulting and digital transformation planning.
Speaking of consulting, presumably many friends have some understanding of the business, in short, it is an intellectual product, which can be said to be a million profits, because consulting does not involve physical products, not to make a difference.
20 years ago, Huawei purchased consulting services from IBM, spending 4 billion.
To give another example, 30 years ago, lithography giant ASML also purchased consulting services in order to grow its business, and the price of one person a day was $700.
Therefore, it can be seen that the cost of consulting services, especially the high-end consulting services engaged in by Huawei, is very high.
There is also Huawei's digital transformation plan, we can list some simple figures, from 2017 to 2021, the number of the world's top 500 companies that purchased Huawei's digital transformation services increased from 197 to 267, and more than half of the world's top 100 companies are also Huawei customers.
Digital transformation planning is also a high-end consulting service, including information strategy and digital transformation top-level design, network architecture consulting, data center infrastructure evolution consulting, cloud architecture consulting, big data consulting, security system and operation and maintenance consulting and other complete ICT technology consulting system.
So this time Huawei in the MWC world stage, began to focus on the enterprise business, some analysts said that this is equivalent to acknowledging that Huawei's enterprise business began to become an important profit growth point for Huawei.
In fact, Ren Zhengfei said that Huawei can survive even if it does not rely on mobile phone business.
What survives is not revenue, but profit.
Only with sufficient profits can we pay employees' salaries, investment in research and development, etc.
But this also once again allows us to see that Huawei does have extraordinary strength in the ICT field, not only 5G, but also not just smart phones.
Therefore, Huawei's annual R & D investment of hundreds of billions of yuan is a profound layout, before Lei Jun also said that Huawei does not understand research and development, but also borrowed Jobs's words to satirize Huawei's low R & D efficiency.
However, it must be noted that research and development is also hierarchical, and there is still a difference between mastering the world-leading core technology and other research and development.
In short, we see that Huawei still has cards to play, and we will wait and see.