The 2012 fiscal year is coming to an end. As the Rotating and Acting CEO, I am gratified to share this great news with you: Huawei's sales revenue for 2012 is expected to exceed US$35 billion, with a net profit of about US$2.4 billion, a more than 10% increase year on year for both. The Carrier Network BG has further consolidated its position in the industry. We have deployed over 130 LTE and over 70 EPC commercial networks worldwide, ranking number one globally in these two fields. The Enterprise BG has launched a series of competitive products such as data center switches, storage products, and full-view telepresence systems. Huawei Device has established solid foundations in product design, quality, and costs. In addition, the smartphone business has made breakthroughs in scale in high-end markets such as Japan, the US, and Europe.
We have weathered another turbulent year: the downward spiral in the global economy, an investigation into cyber security allegations by a particular committee of the US Congress, political upheavals in the Middle East and Northern Africa, as well as natural disasters including floods and earthquakes. I would like to express my most sincere gratitude to our customers, suppliers, and partners across the world. My thanks also go out to our staff members for your dedicated work and to your loved ones for their support. Without your support, Huawei wouldn't have outperformed the market in 2012.
The Mayan doomsday prediction was false, but we see unprecedented information floods on the horizon. Statistics show that the data created in 2012 alone is equal to all the data created in human history before 2012 and this trend will continue. Rapid transmission of data to every corner of the world is an inevitability, which will create incredible demands.
In the era of information floods, Huawei definitely cannot be Lord Ye who claimed to love dragons.[*] Seizing opportunities, focusing on strategy, and simplifying management are the core measures that we will take to achieve effective growth in the next five years.
As a professional ICT solutions provider, we are committed to achieving "high bandwidth, multiple services, and zero wait time". After two decades of development, we are now able to gather all the required human resources and materials to strengthen our investment in the major pipes, including information access, convergence, transmission, switching, and storage. Our historical mission and strategic opportunity is to achieve breakthroughs in key technologies and align our offerings with market demands. Our strategic objective in 2013 is to establish our leading positions in Mobile Broadband (MBB), Fixed Broadband (FBB), and backbone network solutions. Our value does not simply lie in our capability to help customers lower their procurement costs. More importantly, it lies in our capability to increase their competitiveness and profitability. Our goal is to become our customers' trusted partner.
We should devote our limited energy to specific business objectives, and avoid the impulse to expand business blindly. Managers who expand business blindly must be held accountable.
There was a time when rapid growth was Huawei's priority and strong execution was Huawei's distinctive feature. These characteristics have contributed to our fast development, and at the same time created the lingering issue of extensive management at Huawei. As business growth becomes steady and moderate, we have to ensure reasonable profits to support our continuous strategic investment. Looking ahead to 2013, we should enhance customer/supplier facing roles, consolidate customer/project-based budgeting and accounting, and reasonably control costs; we should ensure timely and accurate delivery while improving operating quality. In addition, we need to mitigate the following major risks: risks caused by historical issues which emerge because of slower business growth, operational risks arising from the deteriorating business environment, as well as business risks associated with uncertainties introduced by the pace of business investment and new business development. To survive and develop sustainably, we must prioritize efficiency.
Responsibility and performance are the most important basis for selecting and assessing managers at Huawei. In 2013, we must continue to simplify our internal management: We must delegate more authority to field offices, shift the focus of our HQ organizations to service, support, and supervision, streamline HQ organizations, and simplify processes. Moreover, we must focus less on expense settlement intended for performance appraisals, optimize value assessment and distribution mechanisms, and motivate our staff members to apply full effort to create value.
"Where does happiness come from? It comes only from diligent work." In 2013, we will further our efforts in legal and regulatory compliance across the world, become more open and transparent, and proactively contribute to the betterment of the global business environment. Huawei has business presence in 150 countries and regions worldwide. Apart from providing products and services, we are committed to integrating with local society. We will expand business operations, create jobs, and contribute to tax revenue. We will attract more talent from all over the world to create a better future for the company.
"Do not regret that spring is departing, as it will be twice as enchanting next year." With the concerted efforts of all our staff members, I believe we can achieve our goal of "focusing on strategy, simplifying management, and increasing efficiency". In 2013, we will maintain vitality and effective growth.
Wish you a Happy New Year! May health and happiness be with you always!
Huawei Rotating and Acting CEO
31 December, 2012