"The name of Huawei’s consumer business has gone through ten years. Today, we changed our name to Huawei’s terminal business and entered the commercial market in an all-round way." On the afternoon of April 20th, Yu Chengdong said at an online product launch conference. His position has also become "Huawei managing director, terminal business CEO, smart car solution BU CEO".
In 2021, the revenue of Huawei’s consumer business fell by nearly half, which dragged down the overall revenue. As the head of Huawei’s terminal consumer goods, Yu Chengdong has never stopped trying to break through. Huawei’s whole-house smart business, which started last year, has released the second generation of products this year; The AITO brand, which cooperates with Xiaokang Sailis, has begun to deliver the first car on a large scale, and many key components, including intelligent cockpit, are from Huawei.
Huawei’s layout on commercial terminals has a long history, and many products including desktops have been launched before. This time, the consumer business was directly renamed as terminal business, which showed Yu Chengdong’s determination to enter this new continent.
Huawei commercial terminal layout.
Consumer business revenue has fallen sharply, and Huawei’s new business breakthrough has already begun.
Yu Chengdong said at the press conference that in the future, Huawei’s terminal business will fully cover two modules: consumer products and commercial products. Consumer products will continue to focus on serving mass consumers, while commercial products will focus on serving government and corporate customers.
The consumer business, which once occupied half of Huawei’s revenue, is facing a severe test. On March 28th, nearly a month ago, Huawei released its 2021 financial report. The financial report shows that the terminal business, which relies heavily on advanced process chips, has been greatly affected by external repression, achieving sales revenue of 243.4 billion yuan, down by nearly half year-on-year. In the three restricted business areas of mobile phone, tablet and PC, Huawei’s revenue has declined.
Although the operator business and enterprise business remained relatively stable, under the "drag" of consumer business, Huawei’s operating income in 2021 also dropped from 891.4 billion yuan last year to 636.8 billion yuan, a considerable decline. In the third year of Huawei’s external repression, its revenue declined for the first time.
Under the pressure of revenue, Huawei is also actively seeking new business areas. On the evening of April 3rd, Huawei Heartfelt Community announced that on March 30th, the company held the inaugural meeting of the second batch of "Legions" in Zone K of Huawei Bantian Base in Shenzhen. Ren Zhengfei and company leaders attended the meeting, awarding flags to the ten "legions" of Huawei and making speeches. The ten legions formed this time are Electric Power Digitization Corps, Government Affairs First Netcom Corps, Airport and Track Corps, Interactive Media Corps, Sports Health Corps, Display New Nuclear Corps, Park Corps, Wide Area Network Corps, Data Center Base Corps and Digital Station Corps.
It is understood that Huawei’s "Legion" model is to gather basic research scientists, technical experts, product experts, engineering experts, sales experts and delivery and service experts in one department, focusing on engineering developers and aiming at a single scene (for example, coal mine, smart photovoltaic, smart highway, etc.). This new organizational structure is conducive to breaking the boundaries of various departments of the existing company, and in a short period of time, "quickly assembling resources, interspersed with operations, improving efficiency, and deepening a field", thus achieving rapid business growth.
The Legion Model, together with the existing BG and BU, entrusts Huawei with the ambition of transforming thousands of industries with technology, and it is also a realistic path for Huawei to quickly develop new business and "harvest food" in a short time. The consumer business, which is also in urgent need of new revenue sources, has also set its sights on smart homes and commercial terminals.
One-handed whole house intelligence, one-handed AITO car, Yu Chengdong played a number of transformation cards
In the past year or so, Huawei’s mobile phone conferences have decreased, while Yu Chengdong has appeared more and more in the conferences of various new products. In addition to commercial office products, the other two striking power points are smart homes and smart cars.
On March 16th, this year, Huawei held the spring conference of whole house intelligence and whole scene new products, and launched a new generation of whole house intelligence solution. The central control panel was equipped with HarmonyOS system for the first time. The price of a typical apartment with 80㎡ (2 bedrooms and 1 living room) starts from 39,999 yuan. This is a significant drop from the price of the previous generation solution launched last year, which started at 100,000 yuan.
Yu Chengdong said that Huawei has now opened 64 authorized stores in 43 cities including Beijing, Shanghai, Guangzhou, Shenzhen, Wuhan, Changsha, Wenzhou, Hefei, Chengdu, Nanjing and Fuzhou, and will complete the coverage of 500 stores this year.
"At present, most smart homes are single-point intelligence with smart items as the core, simple systems and initial scenes, and the connection is mainly based on’ point control points’, lacking system-level scene linkage." Yu Chengdong said at the press conference that HarmonyOS Zhilian Ecology has built a relatively complete subsystem. At present, more than 1,900+brand partners have settled in the Harmony OS family, and 4,500+smart items can access the whole house intelligence.
Intelligent cockpit blessed by HarmonyOS system on AITO car.
In the automotive field, Huawei, which has repeatedly reiterated that it "does not build cars", has also acted frequently in the automotive field. In May, 2021, Yu Chengdong took over the post of CEO of BU, a smart car solution. In December, he presided over the release of M5, the first car of AITO brand, and shouted the goal of "annual sales of 300,000 units". AITO is a brand that Huawei cooperates with Xiaokang Sailis. Its key equipment such as intelligent cockpit are provided by Huawei and equipped with HarmonyOS system.
In March of this year, AITO asked M5 to officially start delivery, and it only took more than 70 days from release to listing. Although a few days agoYuIn an interview, he admitted that "300,000 cars can’t be built under the condition that the global cars are short of cores and pieces", but Yu Chengdong still stressed that Huawei will definitely help the car factories that work closely with them to be the first in China and the first in the world.
However, in today’s smart car market, even Huawei will inevitably go through a hard battle in the battle for territory between major manufacturers and brands. In contrast, the commercial terminal, which is only separated from the consumer business by a wall, seems to be a new land that is easier to produce food quickly.
HarmonyOS system has become an important starting point, and the security and controllability of software and hardware have brought obvious advantages to Huawei.
In 2021, while the business of mobile phone tablet declined sharply, Huawei’s wearable devices, big screens and other businesses showed very obvious growth, among which the revenue of wearable devices and smart screens increased by more than 30% year-on-year. There are more than 220 million Huawei devices equipped with HarmonyOS (HarmonyOS system), making it the fastest-growing mobile terminal operating system in the world.
Not surprisingly, there are businesses that have increased significantly, which are basically businesses with relatively low requirements on chip manufacturing. In this kind of business, Huawei’s HarmonyOS system has also become a weapon to expand its territory. At the press conference, Yu Chengdong said that Huawei will continuously enrich the product categories such as commercial notebooks, desktops and monitors, flat panels, smart screens, and wear, and focus on providing commercial office solutions for six major industries, including government and education, medical care, manufacturing, transportation, finance, and energy.
"Yu Chengdong had hoped to sell cars of cooperative brands to make up for mobile phones and expand Huawei’s smart selection categories to reduce the impact of the decline in terminal sales revenue, but cars are long-term products and it is difficult to bring high sales revenue in a short period of time." Fu Liang, an independent analyst in the telecommunications industry, said that Huawei’s commercial terminals have their own operating systems, with controllable software and hardware, which are safer and more reliable. Huawei has obvious advantages when entering the government and state-owned enterprises.
Commercial terminal categories launched at this conference.
Yu Chengdong emphasized that Huawei’s flat panel, smart screen, wearable and other products will rely on the 17 standard customization capabilities and 9 open capabilities brought by the HarmonyOS system to meet the multi-dimensional management needs of the government and various enterprises for terminal equipment, enabling thousands of industries. Customers can customize the brand Logo, settings, desktop, and also open the peripheral capabilities, SDK, and industry system docking capabilities to meet the various customization needs of commercial customers.
However, product procurement in the field of government and enterprises is quite different from personal consumption in the market in logic and play. Although Huawei has a huge carrier business and enterprise business, whether its experience and resources can be reused by the renamed "terminal business" needs more observation. However, Yu Chengdong’s determination to March into the New World has been shown to everyone in this name change.
The Beijing News Shell Finance reporter promised to edit Yue Caizhou and Song Yuting to proofread Liu Baoqing.
