Text/Yang Jianyong
Since the commercialization of 5G, communication companies have ushered in the best period of development. Previous GSMA data showed that as of the end of 2020, 142 5G networks had been commercially used in 57 countries and regions around the world, and pointed out that the development of 5G in my country is particularly eye-catching, achieving continuous coverage in key areas, and a total of nearly 5G base stations were built in 2020. 720,000 seats. For ZTE and Huawei, they are important forces in my country’s 5G deployment.
It should be pointed out that ZTE, which suffered heavy losses in 2018, lost nearly 7 billion yuan that year, putting its operations in trouble. Fortunately, my country officially started the commercialization of 5G in 2019, and then gradually recovered. The net profit for the whole year of 2019 was 5.147 billion yuan. However, behind the strong profits lies the huge income brought by real estate. Shenzhen Bay Super Headquarters Base cooperated with Vanke and confirmed pre-tax profits of approximately 2.6 billion to 2.9 billion yuan in 2019, accounting for more than 50% of the total profits. However, the profit level has increased significantly, indicating that it will set sail again.
In 2020, with the commercialization of 5G and with the help of 5G, ZTE will deliver a beautiful report card in 2020. Revenue exceeded 100 billion, indicating that it is expected to reach a new milestone with the help of 5G. According to the financial report, revenue in 2020 increased by 11.8% year-on-year to 101.5 billion yuan, with net profit as high as 4.3 billion yuan. The three major business segments all showed an upward trend, especially the operator segment, which grew strongly, reaching 74 billion yuan in the year, an increase of 11.2% over the previous year.
This is mainly reflected in seizing the development opportunities of 5G and new infrastructure to achieve both improvement in market structure and share. According to external agency reports, ZTE ranked second in global shipments of 5G base stations in 2020. In addition, its domestic 5G share exceeds 30%, and it has carried out 5G application practices with more than 500 industry partners to empower digital transformation in all walks of life.
ZTE has the ability to provide complete 5G end-to-end solutions. With its leading technology, product and solution advantages in chips, databases, wireless, core network, bearer, terminals and industry applications, ZTE is accelerating Promote global 5G commercial scale deployment. This shows strong technological research and development capabilities. As of the end of 2020, it has approximately 80,000 global patent applications and is also an important global 5G patent company.
Earlier news pointed out that Huawei’s total revenue in 2020 increased by 11% year-on-year to US$136.7 billion, with a profit of US$9.9 billion, an increase of more than 10%. Judging from Huawei's revenue of US$100 billion, it is eight times that of ZTE. The two major communications giants are very different. The ability to make money is even more out of reach. At the same time, there is a huge difference in market value between the two. As of March 26, ZTE's market value was 136 billion yuan, and Hurun Research Institute valued Huawei at 1.1 trillion yuan, making it the most valuable private enterprise in China's large consumer sector.
It is worth mentioning that in the 5G market, ZTE is Huawei’s strongest competitor. And around the 5G industry, ZTE will continue to increase investment and promote the research and development of 5G industry applications. It can be said that ZTE cannot be underestimated in terms of its 5G technology strength. It is also the number one manufacturer in the world in terms of 5G patents. Relying on technological innovation, it has brought about steady growth in operations.
It is believed that competition between the two major communications manufacturers will further intensify. However, Huawei, which has encountered huge challenges, also delivered a beautiful report card last year, with revenue exceeding the 100 billion US dollar mark. On the 5G track, more than 20 industries around the world have deployed 5G demonstration applications, such as coal mines, industrial manufacturing, ports, etc., and global operators have signed more than 1,000 5G industry application contracts.
This is mainly due to its long-term persistence in technological innovation, which has enabled it to grow into a world-class technology giant. In the past ten years, it has invested a total of more than 600 billion in R&D expenses in smartphones, 5G, Internet of Things, cloud services, etc. The market has strong competitiveness, and new technologies such as 5G, Internet of Things, and artificial intelligence are exported through the cloud. The goal is to bring technical capabilities to thousands of industries and empower the digital transformation of the entire society.
Finally, 5G, as a communication technology outlet, promotes the transformation of information technology into the Internet of Everything. As major countries around the world continue to promote 5G commercial services, it will accelerate the application of 5G industry and bring major changes to all walks of life. Drive digital innovation and bring unimaginable new opportunities to the information technology industry. The communications industry will also enter a new round of prosperity, unleashing growth potential for equipment communications manufacturers.
Yang Jianyong is a Forbes columnist and won the NetEase 2020 Most Influential Award. He is committed to in-depth interpretation of cutting-edge technologies such as 5G, the Internet of Things economy, and artificial intelligence. His views and research strategies have been shared by many authoritative media and well-known Business Citations.