Huawei Consumer Business Group 2019 Business Results

Aufgrund der zeitlichen Aktualität wird diese Presseaussendung im englischsprachigen Original versendet.

In 2019, our Consumer BG continued to focus everything we do on consumers. With a fully connected, intelligent world fast approaching, we are committed to delivering an inspired, intelligent experience to consumers across all devices and scenarios.

We have further optimized our Seamless AI Life strategy and made explosive innovations in core technologies. As a result, our reputation is growing among global consumers, and we have reinforced our position as a premium brand.

In 2019, revenue from our consumer business was CNY467.304 million, representing a year-on-year increase of 34,0%. In addition, our monthly active users exceeded 600 million worldwide.

The Seamless AI Life strategy and related substantial progress

In 2019, the Consumer BG continued adhering to the "1 + 8 + N" Seamless AI Life strategy, where: "1" represents mobile phones; "8" represents tablets, PCs, VR devices, wearables, smart screens, smart audio, smart speakers, and head units; and "N" represents ubiquitous Internet of Things (IoT) devices.

This strategy is driven by HarmonyOS and HiAI, with which we are able to support collaborative innovation within our HiLink smart home ecosystem and Huawei Mobile Services (HMS) ecosystem and deliver better hardware and software experiences to users. This enables interconnection and capability sharing among all devices in all scenarios, including smartphones. The strategy allows our consumers to enjoy an intelligent experience that seamlessly shares data and shifts between different scenarios and different types of devices.

Based on the Seamless AI Life strategy, we are continuing to innovate in our core capabilities to improve our smartphone experiences while actively exploring the expansion of our non-smartphone products including PCs, wearables, and smart screens. Thanks to our unique innovations, we have won high acclaim across the market.

Smartphones: In 2019, we shipped more than 240 million Huawei and Honor smartphones, up more than 16% year-on-year, and shipments of our 5G smartphones exceeded 6,9 million units. According to reports from market research firms IDC and Strategy Analytics, Huawei and Honor smartphones together occupied 17,6% of the global market share in 2019, meaning we have maintained our position as the world's second-biggest smartphone brand. In addition, we hold the largest market share in 5G smartphones.

The market influence of Huawei's flagship smartphones has also further increased. In 2019, shipments of our Mate and P series flagship smartphones exceeded 44 million units, up 53% year-on-year. Consumers have even compared the revolutionary RYYB HUAWEI SuperSpectrum Sensor and periscope-style SuperZoom Lens, featured by our HUAWEI P30 Series smartphones, to night vision goggles and telescopes. Shipments of this series exceeded 20 million units within eight months of launch.+

Huawei is a pioneer and leader in foldable 5G phones. The HUAWEI Mate X was our first foray into this realm. With powerful connectivity and intelligent interactive user experiences, the HUAWEI Mate X offers a glimpse into the future of smartphones. The HUAWEI Mate Xs, officially launched in February 2020, further raises the bar and consolidates Huawei's leadership in foldable 5G phones.

PCs: Huawei's PC products (e.g., HUAWEI MateBook X Pro) boast unique innovations like OneHop File Sharing and Multi-screen Collaboration, and deliver interactive experiences to consumers across multiple devices. In 2019, Huawei's PC shipments grew by more than 200% year-on-year.

Tablets: Our tablet revenue maintained its growth despite a continued overall decline of the global tablet market. Specifically:

• The HUAWEI MatePad Pro, launched in November 2019, has an all-screen front with a 90% screen-to-body ratio. This makes it a convenient office assistant, receiving very positive market feedback.

• According to a report from market research firm IDC, Huawei's share in the Chinese tablet market surpassed Apple in 2019 Q3 and Q4 to rank No. 1.

Wearables and smart audio: Our wearables and smart audio products have maintained rapid growth, boosted by the strong sales of the HUAWEI WATCH GT 2 and HUAWEI FreeBuds 3 – the world's first True Wireless Stereo (TWS) earbuds with open-fit active noise cancellation. For example:

• Shipments of our wearables and smart audio products increased by 170% and more than 200% year-on-year, respectively in 2019.

• The smart glasses we launched with Gentle Monster perfectly combine technology with fashion, becoming an instant hit after launch.

Smart screens: In 2019, we launched our Huawei Vision and Honor Vision smart screen products, upgrading large-screen devices into intelligent hubs for interactions and cross-screen experiences, as well as IoT control centers and media and entertainment centers. Large-screen devices have been transformed into household smart assistants, smartphones with super-large screens, "housekeepers" for the HiLink ecosystem, and super home theaters. Our smart screen products have set a new trend for the television industry.

VR devices: The weight and volume of the HUAWEI VR Glass are only one third of an average VR headset, completely reshaping the form factor of this product category. As a perfect accessory for 5G smartphones, the HUAWEI VR Glass brings an immersive VR experience in 5G-supported scenarios and tears down the barriers of computing through VR Screen Mirroring. This allows consumers to take full advantage of the huge amounts of media and entertainment resources available on their smartphones.

Enhancing all-scenario device chipsets, OSs, and the global cloud service presence

To guarantee a Seamless AI Life for consumers, we are actively building the basic capabilities we will need to deliver all-scenario device chipsets, operating systems, and cloud services. With significantly improved competitiveness and user experience, our products across all scenarios have been well received by consumers the world over.

Chipsets: We have expanded from mobile device chipsets to all-scenario device chipsets. In 2019, we launched multiple processors for different devices, including the Kirin 990 5G for our flagship smartphones and the Kirin A1 for TWS earbuds and other wearables.

As the world's first 5G System-on-Chip (SoC), and the first SoC to integrate a 5G modem, the Kirin 990 5G uses the industry's most cutting-edge 7nm+ EUV manufacturing process. This gives it unrivaled levels of performance and energy efficiency. Based on the outstanding 5G connectivity delivered by Balong 5000, the Kirin 990 5G is the first full-frequency 5G SoC to support both non-standalone (NSA) and standalone (SA) architectures and TDD / FDD full frequency bands. The Kirin 990 5G achieves a peak downlink rate of 2,3 Gbit/s and a peak uplink rate of 1,25 Gbit/s at sub-6 GHz. This enables the HUAWEI Mate 30 Series to deliver an unmatched 5G experience to consumers.

The Kirin A1 is the industry's first BT 5.1 & BLE 5.1 SoC. It boasts efficient and stable connectivity, robust audio processing, and superior anti-interference capabilities. The Kirin A1 also supports intelligent and natural human-device interactions, and enables premium audio quality and immersive gaming experiences thanks to instant acoustic feedback, giving consumers a seamless, high-quality audio experience in all scenarios.

Operating systems: We have leveraged breakthroughs in underlying software technologies, such as compilers, to shift from upper-layer user interface (UI) optimization to all-scenario device operating system development. This provides strong operating system capabilities that can achieve multi-screen collaboration and deliver an inspired, intelligent experience to consumers across all devices and scenarios.

As an underlying software technology that was developed in-house, the HUAWEI ARK Compiler provides brand-new mechanisms for compiling and running systems and applications. It is also the first static compiler capable of performing on par with Android's virtual machine. The HUAWEI ARK Compiler addresses Android operating efficiency problems in the underlying layer, while the Deterministic Latency Engine ensures system tasks are executed orderly and efficiently, bringing users consistently smooth experiences.

EMUI 10.0, for the first time, applies the concept of a distributed system to all-scenario device systems. The software system can abstract the hardware capabilities of devices and provide them to upper-layer applications through the virtual resource pool. This allows applications to intelligently invoke multiple devices on demand. When using EMUI 10.0, consumers will benefit from the intelligent collaboration of multiple devices, and enjoy a high-quality experience equal to using one incredibly powerful virtual device.

Microkernel-based HarmonyOS is an intelligent, distributed, next-generation operating system that can be deployed on multiple devices. It decouples hardware capabilities from devices and connects different devices through distributed virtual buses, allowing applications to easily invoke the peripheral hardware capabilities of other devices. HarmonyOS delivers a seamless experience to consumers across devices, and meets the new requirements for operating systems in the all-scenario, intelligent era.

HMS: We have built basic capabilities in cloud services worldwide. HMS is now available in more than 170 countries and regions, and we have established six regional operations centers and 15 data centers around the world to support these services.

At the same time, we leverage our unique capabilities in chip-device-cloud synergy to continuously improve the HMS app experience surrounding our Seamless AI Life strategy. Many of our apps, such as AppGallery, HUAWEI Browser, HUAWEI Assistant, HUAWEI Video, HUAWEI Music, HUAWEI Reader, HUAWEI Themes, HUAWEI Mobile Cloud, and HUAWEI Wallet have been launched around the world. By the end of 2019, HMS had over 400 million monthly active users, and was winning over an increasing number of consumers.

Building open HMS and HiLink ecosystems for developers to deliver inspired customer experiences

App ecosystem: The Consumer BG continuously builds competitiveness targeting the ecosystem and experiences. We fully opened up our HMS to developers around the world, allowing them to quickly and conveniently access the HMS ecosystem for app innovation and ecosystem resource sharing.

HMS Core provides the key capabilities that can help developers focus on innovation. This allows them to readily access the HMS ecosystem, and intelligently distribute apps to all devices across all scenarios worldwide. In 2019, Huawei opened up its chip-device-cloud capabilities to developers, including HMS Core like Maps, Machine Learning, Scan, Account, Push, In-App Purchases, and Ads. We also launched Quick App and HUAWEI Ability worldwide, helping app developers deliver innovative app experiences to 600 million Huawei device users around the world.

HUAWEI HiAI, an open AI capability platform for smart devices, has entered phase 3.0. With its chip-device-cloud architecture, HUAWEI HiAI opens up chipset, app, and service capabilities, enabling developers to leverage Huawei's powerful AI processing capabilities to substantially reduce costs and drive innovation for optimal and intelligent app experiences. In its infancy, HUAWEI HiAI 1.0 supported only single type devices. 2.0 expanded to support devices such as smartphones, tablets, and smart screens. Now, HUAWEI HiAI 3.0 goes even further, pooling hardware resources to form super devices. Powered by distributed AI, devices reinforce each other, providing users with the best possible experience.

Thanks to the aforementioned open capabilities, global and regional mainstream apps have been quickly launched on the AppGallery, and over 55.000 apps have been integrated with HMS Core worldwide. The AppGallery is available in more than 170 countries and regions, providing a huge array of high-quality global and local apps for users. The platform also provides unique, innovative, and intelligent experiences while strictly protecting user privacy. In 2019, there were 210 billion app downloads from the AppGallery, while its monthly active users exceeded 400 million. The Quick App available on the AppGallery brings revolutionary mobile app experiences to Huawei's device users, who can run apps without installing them. The Quick App will build a new app ecosystem in the 5G era.

Huawei actively engages with developers worldwide to help them create apps that deliver inspired experiences. In addition to our annual Huawei Developer Conference, we also held 45 HUAWEI Developer Day events in 32 countries and regions over the course of 2019, allowing us to talk with tens of thousands of developers face-to-face. By the end of 2019, the number of developers registered with HMS exceeded 1,3 million.

We also provide the AppGallery Connect service for developers worldwide, helping them operate efficiently throughout the entire app creation process from initial ideation and app development to distribution, operations, and analysis. We have revamped the Shining-Star Program by increasing the program's incentives from CNY1 billion to US::News_LongText:: billion in order to motivate developers to innovate. We have also expanded the program outside of China to also cover global developers, and worked with industry-leading ecosystem partners to build incentive alliances. Our DigiX Lab aims to drive and support the innovation of developers around the world.

HiLink ecosystem: We have opened up our operating system and IoT chip capabilities to IoT developers, and provided them with services such as development, certification, and testing to efficiently support their product launch.

By the end of 2019, the HiLink smart home platform had accumulated over 50 million users, and covered over 1.000 product models in more than 100 product categories. The total shipments of IoT devices that support the HiLink protocol had exceeded 150 million units. We have also established strong partnerships with more than 600 home appliance brands, including BSH, Philips, Panasonic, Toshiba, Allegion, Canon, Kärcher, Blueair, Legrand, Sonos, Bose, Haier, Gree, and Midea, providing our consumers with a greater variety of quality options for smart living.

Protecting consumer privacy with cutting-edge technology and building a privacy protection brand trusted by consumers

The Consumer BG is committed to building a brand that is trusted by global consumers in terms of privacy protection. We believe that privacy is a basic right of our consumers, and that they should have complete control over their privacy. We regard privacy protection as a cornerstone of our product design, and believe that it is equally as important as the experience the products provide.

We always adhere to the following four basic principles when protecting user privacy:

Transparency: The way we process personal data is transparent to our consumers, who can make decisions according to their wishes and fully control their privacy.

User benefits: We believe that any collection of personal data should always benefit consumers, for example, by providing a better user experience.

Security: Effectively protecting user privacy requires advanced technologies. We leverage industry-leading security technology to protect personal data, safeguarding privacy while improving user experiences.

Legal compliance: We strictly comply with the Generally Accepted Privacy Principles (GAPP), the EU's General Data Protection Regulations (GDPR), and all other applicable laws and regulations in the countries where we operate.

We integrate the above privacy protection principles into our products right from the beginning in product design. These principles are then followed throughout product development in order to fully protect user privacy. Our leading technologies have enabled us to produce many outstanding results in privacy protection, gaining us the recognition of leading global organizations.

For example, the HUAWEI Mate 30 Series comes with Huawei's in-house formal microkernel Trusted Execution Environment (TEE). Sensitive data, such as consumer biometric data and passwords, is stored only in the TEE, while operations like fingerprint verification, facial recognition, and password confirmation are all performed in the TEE. This move effectively prevents leaks of user privacy. Huawei's TEE obtained the following certifications:

• Common Criteria (CC) EAL5+ certification, the highest level that a commercial OS kernel can obtain during security certifications

• Numerous international authoritative security and privacy certifications, including the EMVCo certification in the finance industry and the ePrivacyseal EU certification

In the HMS domain, we have established a complete system for managing personal data protection, and we are the global leader in terms of personal data security management, transparency, and privacy compliance. For example:

• The AppGallery manages the security of apps with a unique four-layer system: malicious behavior detection, security vulnerability scanning, privacy leak checks, and manual real-name reviews. This system ensures that only secure apps are available for download from the AppGallery.

• In November 2019, HMS became one of the first recipients of the ISO/IEC 27701 privacy protection system certification issued by the British Standards Institute (BSI), an authoritative international standards organization. This shows that our ability to protect user privacy and manage information security is recognized by world-leading organizations.

Building global flagship stores into showcases of premium retail services and optimizing the "last-mile" sales and service system

In 2019, the Consumer BG actively explored and built brand-new premium retail and service models to improve Huawei's brand image and optimize our "last-mile" sales and service system. By the end of 2019, Huawei had over 65.000 retail stores, display zones, and display counters around the world, including more than 6.000 experience stores.

On September 28, 2019, as the start of Huawei's efforts to build a global retail system for direct sales, we opened a Global Flagship Store at the heart of Shenzhen's vibrant MixC World. This store has reinvented the traditional image of Huawei retail stores, and become the city's "living room", a new cultural landmark. Featuring a sophisticated design and cutting-edge technology, the store provides an offline, tech-savvy space that allows consumers to study, share, connect with their loved ones, and enjoy inspired experiences.

In customer service, we are committed to building and improving our basic service capabilities, and focusing on three service platforms: offline services, online services, and self-service. Throughout 2019, we provided services to over 50 million consumers. At the same time, we used AI technologies to pursue a transformation towards intelligent customer services, and accepted over 25 million consumer inquiries through robots.

By the end of 2019, the Consumer BG had over 2.600 offline service centers in 105 countries and regions, providing convenient and fast repair services to consumers. In 2019, global customer satisfaction with Huawei's services increased by 8 percentage points compared with 2018. We also accepted more than 1.000 consumer suggestions and requests related to the optimization of products and services, aiming to constantly improve consumer experiences.

Thanks to the continuous improvements made by the Consumer BG in product innovation, ecosystem building, retail, services, and other domains, our brand recognition and reputation among global consumers continue to grow. We have taken another solid step forward on our journey toward becoming an iconic global tech brand.

A report from brand research firm Ipsos showed that Huawei's global brand awareness increased to 93% in 2019, a 4-percentage-point increase from 2018. Meanwhile, brand consideration among global consumers had increased to 58% in 2019, up from 49% in 2018. Global consumers are becoming increasingly aware of Huawei as a stylish, vibrant, innovative, and high-end brand.

We have always stressed that everything we do in the Consumer BG begins and ends with consumers. With this in mind, we will continue adopting our Seamless AI Life strategy in 2020. We will continuously innovate in core technologies, including 5G, AI, AR, and VR, while actively improving consumer experience by focusing on consumer touch points such as retail, service, and marketing. Our ultimate goal is clear: Deliver an inspired and intelligent experience to consumers across all devices and scenarios.

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Über die Huawei Consumer Business Group

Huawei bietet mit seiner Huawei Consumer Business Group (CBG) Smartphones, mobile Breitbandgeräte, Wearables, Heimgeräte und Cloud-Services an. Das Unternehmen ist der weltweit zweitgrößte Smartphone-Anbieter und betreibt aktuell 14 Forschungs- und Entwicklungseinrichtungen in China, Deutschland, Indien, Russland, Schweden und den USA. Den Anspruch, Premium-Produkte zu schaffen, die sich durch Innovation differenzieren und technologische Durchbrüche erzielen, unterstreichen auch Partnerschaften mit in ihren Bereichen führenden Herstellern wie Leica und Harman Kardon.

Huawei wurde 1987 gegründet. Heute sind Huawei Produkte und Services in über 170 Ländern verfügbar und werden von rund einem Drittel der Weltbevölkerung genutzt. In Österreich ist Huawei seit 2006 mit einem eigenen Standort vertreten und beschäftigt derzeit rund 100 MitarbeiterInnen.

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