Huawei

Huawei is continuing to succeed in spite of many challenges in China and abroad, and to have a major impact on the telecom sector. Huawei announced that 1H revenues were $3.3bn and should be over $8bn (above target and +33% yoy) by the end of the year. Gross margin, however, lost 4 points to about 38%, translating all challenges Huawei has to face in China and abroad. As a consequence, net income will grow slower than revenues. Orders grew 25% in 1H06 to $5.2bn, of which 65% are made outside China. Orders should be over $10.7bn by the end of the year. Besides good financial results, Huawei is also reporting significant contract wins and breakthroughs in developped countries (Europe, US,) in mobile, optical and router markets. In 2Q06, it achieves, according to market research reports, ranking first in the optical market for the first time, and position 3 in the carrier Ethernet switch/router market. Huawei had an headcount of 44,000 at the end of June.