$17B in 2019 research, up >10%

Huawei is having a rough year, with sales only up 23% to US$58 billion. Phone sales were only 118 million units, up a mere 24% in a declining market. Net profit was only about $5 billion.

Chairman Liang Hua carefully did not mention the threat to Huawei’s survival more than five times. He did, however, show pictures of the bullet-riddled plane, symbolizing what Huawei has to face.

Huawei sales were less than Google ($75 billion) or Microsoft ($64 billion.) Apple, Amazon, and AT&T remain larger. The combined sales of Alibaba and Tencent (~$55 billion) or Facebook and Disney (~$59) are just about as large as Huawei’s revenue.

Kidding aside, Huawei is doing fine.

Liang knows better than I that Huawei is in no danger. He’s just following Ren’s example and exhorting the team. For the last six months, I’ve been pointing out the ignorance of those who doubt the company will make it.

Some details:

Although telcos worldwide are still holding back on capital spending, Huawei’s equipment sales are holding up. It has shipped 150,000 5G radios and recently signed 11 more 5G contracts.

Huawei’s cloud business grew rapidly. It’s cutting out a few marginal products that used American parts but has maintained production and shipments without any pauses.

Huawei is raising R & D to $17 billion in 2019, either the third or fourth-highest total in the world. Much of that spending is going to universities and basic research, both essential to Huawei’s future. The dozens of Huawei research centres around the world are growing as fast as they can find qualified employees. (Except in the U.S., where the blockade has forced Huawei to fire over 400 people including top researchers.)

It is hiring 25,000 currently, more than half in R & D. For a handful of top Ph.D’s, the company is offering starting salaries of almost $300,000/year. It now has five R & D centres in Russia, where it is competing with Google for the very best new engineers.

Huawei will survive and thrive.

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