The numbers: Huawei Technologies reported a 34% increase in net income to 21 billion yuan ($3.38 billion) for 2013, as revenues climbed 8.6% to 239 billion yuan. Revenue in China, which accounts for 35% of its business, was up 14%. The company predicts that global sales will rise another 10% in 2014.
The takeaway: Growth outside of China in Huawei’s core network equipment business is limited, due largely to concerns from some western governments about possible spying. In response the company has pushed aggressively into other businesses like enterprise cloud computing and mobile phone manufacturing. Already the world’s third-largest smartphone maker behind Samsung and Apple, Huawei plans to to increase its smartphone market share from 4.9% in 2013 to 8% this year, and promises to upend management structures and compensation to encourage growth.
What’s interesting: CEO Ren Zhengfei’s ruminative letter in the company’s annual report offers a sometimes beguiling, sometimes perplexing guide to how the company’s future may unfold. “Huawei is like a big tortoise,” he writes. “In the past 25 years, we have crawled along, not seeing the flowers on the road. While many people have become rich, riding on the rising economy over the last two decades, we still are on our journey of hard work and dedication.”
Ren also seems to have a healthy obsession with Elon Musk, making repeated references to electric carmaker Tesla and the Dragon rockets made by Musk’s other firm, SpaceX: “When we look up to find in front of us the likes of Dragon spacecraft and Tesla, and look at ourselves—the clumsy way we move ahead, we can’t help but think, ‘Can we catch up and surpass them?'”