Huawei’s R&D spend is massive even by the standards of American tech giants

Banking on innovation.
Banking on innovation.
Image: Isaac Brekken/AP Photo
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Chinese tech company Huawei is doubling down on research and development. In reporting its annual financial performance today (March 31), the company said it invested 40.8 billion yuan, or $6.6 billion, in research and development in 2014, up 29% from the year prior. Overall, it’s spent 190 billion yuan in innovation over the past decade.

These numbers are massive even by the standards of American tech companies. Last year, Huawei outpaced Apple, Oracle, and Facebook in its R&D investments. However, it still trails Intel, Microsoft, Google, and Amazon in total R&D dollars spent.

Relative to overall revenue, Huawei is actually spending more on R&D (14.2% of revenue) than Microsoft (12%) and Amazon (10.4%), and isn’t far behind Google (14.9%). However, tech companies with lower revenues—such as Facebook, which reported revenue of $12.47 billion last year, and Twitter, which reported $1.4 billion—are investing more of their top line in innovation, respectively at 21% and 49%. (One interesting thing to note in the chart below is how little Apple has put into R&D as a percentage of revenue—just 3% in 2014.)

Ken Hu, one of Huawei’s three rotating CEOs, told investors the company plans to dedicate $60 million of its 2015 R&D budget toward developing 5G technology. The next-generation mobile wireless standard is expected to come online in Britain by 2020 and reach the US by 2025. Researchers in the UK recently achieved 5G mobile web speeds comparable to fiber internet at 1 terabit per second, some 65,000 times faster than the average 4G download speed.