Huawei Sues Record Revenue Drop Due to Sanctions Suppressing Its Consumer Division

What happened now? More than two years since the Donald Trump administration blacklisted Huawei, the Chinese giant reported its biggest drop in revenue, more than 29%, in the first half of 2021. It also experienced a 38% decline in sales in the three months ending June. …

Huawei’s revenue for the first half fell to 320.4 billion yuan ($ 49.56 billion), the agency said. Reuters… Unsurprisingly, the biggest drop occurred in the consumer business group, which once represented more than half of its business. The segment, which includes the company’s phones, declined 47% to 135.7 billion yuan.

Profitability for the first half rose slightly, up 0.6% to 9.8% (RMB 31.4 billion), mainly driven by efficiency gains.

Using numbers, Bloomberg Huawei’s sales for the previous quarter were estimated to have declined 38% to 168.2 billion yuan ($ 26 billion).

“These were challenging times,” incoming chairman Eric Xu said in a statement Friday. “Our goal is to survive and do it sustainably. Despite the decline in revenues from our consumer business due to external factors, we are confident that our operator and corporate business will continue to grow steadily. ”

It took some time for Huawei to feel the impact of being listed by the Bureau of Industry and Security (BIS) in May 2019, preventing it from accessing US-made technology or dealing with companies using US-based tools or developments, including TSMC. , no license. In the fourth quarter of 2020, the tech giant saw its quarterly revenue decline for the first time in history and was forced to sell its Honor division so that the budget phone maker could avoid sanctions.

Huawei is no longer among the top phone makers in the world and Europe, and tablet shipments fell 53.7% in the second quarter. Domestic sales have also declined: for the first time in seven years, Huawei is no longer among the top five phone manufacturers in China.

Huawei’s telecommunications equipment division also saw its revenue decline 14% YoY as the pace of 5G rollout in China slowed.

That’s not all bad news for Huawei. Revenue from the corporate business group rose 18% to 42.9 billion yuan in the first half as a result of Covid-19 and increased demand for ICT connectivity, while its cloud services business doubled to take up a 20% share of China market. …

With mobile profits plummeting, Huawei is turning to other sources of revenue, from cloud computing and wearables to smart cars. It is also moving into more traditional industries, including pig and coal mining.

Image Credit: Karlis Dambrans, Yuangeng Zhang

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