Thursday, March 28, 2024

Huawei reports the biggest drop in revenue

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Shenzhen:

Chinese telecommunications giant Huawei Technologies’ revenue fell by nearly one-third in the first half of 2021, US sanctions hindered its once dominant mobile phone business, and new business areas are still in the early stages.

The company said on Friday that its revenue was RMB 320.4 billion (US$49.56 billion).

The biggest decline was the Huawei Consumer Business Group, which includes mobile phones, whose revenue fell 47% to 135.7 billion yuan.

A company spokesperson said that its net profit margin barely increased by 0.6 percentage points to 9.8%, which was mainly due to efficiency improvements.

In 2019, former U.S. President Donald Trump included Huawei on the export blacklist and prohibited it from acquiring key technologies from the United States, thereby affecting its ability to design its own chips and purchase components from external suppliers.

According to consulting firm Canalys, the sanctions have hindered Huawei’s mobile phone business. Huawei withdrew from China’s top five suppliers for the first time in seven years this year, with shipments of 6.4 million units.

In contrast, the number of mobile phones shipped in China in the second quarter of 2020 was 27.4 million, excluding the shipment of Honor’s cheap phones. Huawei sold the brand in November.

According to an internal memo shared by founder and CEO Ren Zhengfei with Reuters in May, Huawei is trying to shift to software and business areas that are not at risk of US pressure.

“We have set strategic goals for the next five years,” said Xu Zhijun, Huawei’s rotating chairman, in a statement announcing the results. “Our goal is to survive and survive in a sustainable way.”

The company started rolling out its Harmony operating system in June, which means it no longer fully relies on Google’s Android platform.

US sanctions prohibit Google from providing technical support for new phone models.

A spokesperson said that due to the Covid-19 outbreak stimulating industry demand for ICT connectivity, Huawei Enterprise Business Group’s revenue in the first half of the year increased by 18% to 42.9 billion yuan.

According to Canalys, Huawei’s cloud service business is also growing strongly, more than doubling its scale in the first quarter, reaching a market share of 20% in China.




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