The pattern has been set? From the four giants of the financial report to see the "pandemic" under the communications equipment market

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After three years of wireless market "winter", 5G commercial equipment manufacturers ushered in the long-awaited "spring", but the four major equipment vendors road, have been The path of the four major equipment vendors has been 'parted ways'. The global spread of the new crown epidemic, and how the equipment market will cast a shadow?

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Wen | Communication Industry News (Network) Dang Bo Wen

After three years of wireless market "winter", the official commercialization of the 5G and the scale of the construction of the equipment vendors have undoubtedly ushered in the long awaited. The equipment vendors ushered in the long-awaited "spring".

March 31, with Huawei announced 2019 annual report, Huawei, ZTE, Ericsson, Nokia, led by the four major communications equipment vendors in 2019 "report card" have been released one after another, from the financial report, the four major equipment vendors revenue and profit compared to last year have achieved growth, of which Huawei in the United States, the "strong", and the "strong". strong> Huawei in the U.S. "entity list" under the pressure of the first annual report still realized the uptrend, Ericsson to achieve the "V" word rebound, Nokia's profits turned positive, ZTE performance is gradually returned to the level of 2017 before the sanction, under the 5G , the spring of equipment vendors seems to have come.

5G gave birth to the " V" word reversal, and the Matthew effect is beginning to show

2019 is an extraordinary year for equipment vendors, a year in which 5G was formally commercialized, and more than 60 operators around the world deployed 5G networks, with more than 50 officially launching 5G networks. More than 50 officially launched 5G commercial services, although the wireless market still presents a four-legged tripod competition pattern, but as the leading equipment vendors Huawei is constantly pulling the body position between Nokia, Ericsson and ZTE.

In 2019, Huawei's global revenue reached 858.8 billion yuan, up 19.1% year-on-year, and its net profit was 62.7 billion yuan, up 5.6% year-on-year. In the carrier business, Huawei realized revenue of about 296.7 billion yuan in 2019, which accounted for 34.5% of the total revenue, up 3.8% year-on-year.

From the four-year results, Huawei's revenue and profit have continued to be high, in which revenue has been growing at a momentum of more than 15% per year, and the size of Huawei's revenue has nearly doubled compared to four years ago, and in terms of profit, Huawei has also realized profit growth of more than 15% for three consecutive years, in addition to a year-on-year increase of 5.6% in profit in 2019. Especially in 2019 Huawei under the pressure of the United States "entity list", realized double growth in revenue and profit, and at the same time, in the ecological layout of the ecological layout has also come out of the "last resort" solid steps.

Nokia has achieved double growth in revenue and profit, and has also taken a "last resort" in ecological layout.

Nokia's full-year 2019 net sales of 23.315 billion euros (equivalent to 181.311 billion yuan), compared with 22.563 billion euros (equivalent to 169.924 billion yuan) in the same period last year, an increase of 3.33%, and a net profit of 11 million euros (equivalent to about 84.24 million yuan), an increase of 103.28%.

Ericsson 2019 full-year net sales reached to 227.2 billion Swedish kronor (equivalent to 161.078 billion yuan), an increase of 8% year-on-year; to achieve a net profit of 1.8 billion Swedish kronor (equivalent to 1.276 billion yuan), an increase of 129.32%.

Ericsson realized a "V" reversal in 2019, with higher revenues. At the same time, in 2018 Ericsson net profit achieved "V" rebound, 2019 Ericsson profit is also officially "positive", According to understanding, Ericsson has six consecutive quarters of organic sales growth, and

And the "nirvana rebirth" of ZTE's revenue is gradually close to the "sanctions" before the level of profits to achieve substantial growth, ushered in the "turn positive! "

This is the first time I've ever seen a ZTE company in the United States. 2019 ZTE Corporation realized revenue of 90.737 billion yuan, an increase of 6.11% year-on-year; net profit of 5.148 billion yuan, an increase of 173.71% year-on-year, of which the carrier network to achieve operating income of 66.585 billion yuan, an increase of 16.66% year-on-year, is the main contribution to the growth of the performance of 2019.

Analyzing the financial reports of the four major equipment vendors, whether it is revenue or profit, Huawei is greater growth to pull away from the other three equipment vendors. Huawei's 2019 total revenue is close to 2 times the sum of the revenue of Nokia, Ericsson and ZTE, and the total net profit is close to 10 times the sum of the net profit of the other three, and the horse-traffic effect is beginning to emerge.

Communications Industry News all-media editor-in-chief Xin Pengjun believes that from the latest financial results, the major equipment vendors in 2019 collectively jumped a "V" dance, to achieve the revenue, profit upward, but from the longer interval, the major equipment vendors have "But in the longer term, some major equipment vendors are climbing uphill against the wind, and some are sliding downhill with the wind. In the development process, technology is not isolated from politics, the black swan still often fly up, the development of the road major equipment manufacturers both innovative surging, but also "fate".

"The four major equipment vendors have parted ways"

Undoubtedly, in addition to the market landscape and the size of the enterprise, the four major equipment vendors have also been able to achieve the same results.

In addition to the market pattern and enterprise scale, the four major equipment vendors' business segments have also parted ways, and the business model and business structure have been very different.

In 2019, Huawei's revenue is mainly divided into three major segments, driven by the 5G replacement dividend, Huawei's consumer business realized sales revenue of 467.3 billion yuan in 2019, a year-on-year increase of 34%, accounting for 54.4% of the total revenue, which has already exceeded the carrier business and become Huawei's main source of revenue, and the revenue of the enterprise business is also to reach 897

ZTE, on the other hand, has also prioritized its consumer business in addition to its carrier business, including products such as cell phones, mobile data terminals, home information terminals, and converged innovation terminals, as well as related software applications and value-added services. ZTE's consumer business revenue in 2019 amounted to 14.997 billion yuan, a year-on-year decline of 21.93%, accounting for 16.53% of the total revenue, in addition, ZTE's 2019 government and enterprise business revenue amounted to 9.154 billion yuan, accounting for 10.09% of the total revenue.

In contrast, Ericsson and Nokia's revenue structure is more "pure", which Nokia's single network services accounted for nearly 80% of total revenue, and, from the revenue structure, software and technology side of revenue from the The overall summary is that it's all part of the operator's business.

Overall, Huawei and ZTE is undoubtedly the end-to-end information and communications business layout of the whole ecosystem, while Nokia, Ericsson, seems to be constantly shrinking and return to the telecommunications network itself.

The communications industry is essentially a technology industry, the four major equipment vendors behind the ability to compete is the technology and R & D "competition". In this, Huawei has been investing in research and development of large households, each year 10% of operating income for research and development, nearly ten years to invest in research and development costs totaling more than 600 billion yuan, 2019 research and development costs is to reach 131.7 billion yuan, accounting for 15.3% of annual sales revenue.

Also maintaining a high level of R&D investment is ZTE, in 2019, ZTE's R&D investment reached 12.548 billion yuan, an increase of 15.06% year-on-year, and R&D investment accounted for 13.83% of operating income.

Xin Pengjun pointed out that after recent years of transformation, change, set the stage, the development path of the four giants of the communications industry has basically "parted ways", Huawei has become the communications industry chain end-to-end dominant vendor with a certain degree of basic research and ecological capabilities, ZTE is The company's main goal is to provide the best possible service to its customers, and to provide the best possible service to its customers in the market.

2020: how to go under the big " epidemic"?

The outbreak of the new crown epidemic and the spread of the global, has brought the impact of the communications industry. 3GPP suspended Release 16 and Release 17 standards freeze progress, some analysts believe that , 2020 global 5G construction is bound to slow down compared to the plan, for the equipment manufacturers, 2020 in the active "The company's newest product is a new generation of mobile phones, which will be used in the next few years.

Ericsson President and CEO Borje Ekholm pointed out that Ericsson's investment in the digitization of business processes will increase costs in 2020, and will increase productivity in 2021 and beyond, thereby improving profitability.

Huawei's challenge won't be small either. Huawei Chairman Liang Hua pointed out that in 2020, Huawei is likely to face even greater difficulties, both in overcoming the challenges of the long-term "list of entities" restriction, as well as to deal with the impact of the epidemic.

But it should be noted that China, as one of the world's largest 5G markets, is affected by the "new infrastructure", the overall 5G development pace will not slow down, in the network construction and application level is ushering in a new round of acceleration.

A few days ago, China Mobile announced the 2020 5G phase II wireless network main equipment procurement list of successful candidates, of which, Huawei won the total contract share of 57.3%, ZTE won 28.7%, Ericsson accounted for 11.5%, 2.6% of China's Xinxin, Nokia is regrettable "! Nokia slipped out of the list.

As one of the oldest equipment vendors Nokia in the equipment procurement regrettable list, to the communications equipment pattern of change to the imagination. In response to the recent network circulation of the "letter to Unicom" event, Shanghai Nokia Bell CEO Ma Boze said in an open letter, as in the Chinese communications market service for nearly 40 years of communications "veterans", 5G to any manufacturer is

Network circulated "letter to Unicom"

It is worth mentioning that, on the evening of April 7, China Mobile announced the 2020 5G SA core network new equipment centralized purchasing bidding list of candidates, Huawei, ZTE, Ericsson once again listed, and Nokia once again out of the list. and Nokia is once again out of the running.