The margins are just too low
If you’re expecting Huawei to come out with more budget offerings similar to their Y5 2017 in the coming months, we have bad news for you: the chief of Huawei’s consumer division, Richard Yu, has said that they’re pulling out of the low-end handset business.
“We are giving up the very low-end devices because the margin in this is extremely low, and it’s not making enough profit for us,” Yu said.
Yu didn’t specify which products he’s alluding to or what particular price bracket their very low-end devices fall under. Each manufacturer has their own price ceiling and classification of low, mid-range and high end devices.
His comments come as Huawei reported a sharp fall in revenue growth the first half of the year, which is a stark contrast to their phenomenal growth in 2016. Their growth this year has only been 15% in revenue amounting to around RMB 283.1 billion ($42 billion) during the first six months of 2017, which is half of what their growth was in the same period last year.
