Huawei revenues drop as smartphones hurt by US sanctions | Economic news
By JOE McDONALD, AP Business Writer
BEIJING (AP) – Chinese tech giant Huawei’s revenue fell 29.4% year-over-year in the first half of 2021 as smartphone sales fell under US sanctions imposed in a fight with Beijing over technology and security.
Revenue fell to 320.4 billion yuan ($ 49.6 billion), according to figures released Friday, from 454 billion yuan ($ 70.2 billion) reported for the first half of 2020. This is due in part of the sale by Huawei in November of its brand of smartphones Honor at low prices. in the hope of reviving unity by separating it from the sanctions on the parent company.
Huawei Technologies Ltd. struggles to maintain market share after then-President Donald Trump cut access to U.S. technology and services in 2019, including high-end processor chips, cards and music from Google. Washington says Huawei poses a security risk and could help Chinese espionage, which the company denies.
Sales of Huawei’s consumer unit, which includes smartphones, fell 47% from figures released for the first half of 2020. This unit accounted for 42% of total revenue.
Sales of network equipment and other technologies to telephone and Internet companies fell 14.2%, while business unit revenues increased 17.2%.
“Our goal is to survive and to do so in a sustainable way,” Eric Xu, one of the three leaders who take turns in the presidency, said in a statement. “Despite a decline in revenues from our consumer business caused by external factors, we are confident that our carrier and corporate business will continue to grow steadily.”
The company gave no profit figures but said its net margin was 9.8%. This would be down from the 11.1% reported for the first quarter.
Huawei, headquartered in the southern city of Shenzhen, near Hong Kong, earlier said it achieved a 3.8 percent profit gain in 2020 to 891.4 billion yuan (135.8 billion yuan). dollars), but Xu warned that 2021 would be a “difficult year.”
Huawei has responded by focusing on its sales in China and for electric and self-driving cars, industrial grids and other applications less vulnerable to US pressure.
Huawei has a stock of US chips for high-end smartphones, but executives have said they are out of stock. Huawei designs its own chips, but US controls prevent suppliers from using US technology to produce them.
Huawei rolled out of the top five smartphone brands in China by sales in the three months ending June for the first time in more than seven years, according to Canalys. Honor was No. 5 but its market share fell to 9% from 14% a year earlier.
“Smartphone brands are vying fiercely to exploit Huawei’s decline,” Canalys analyst Amber Liu said in a July 29 report.
Huawei says it is owned by Chinese employees who make up half of its 197,000 employees in 170 countries. The company began reporting financial results a decade ago in an attempt to defuse Western security concerns.
Huawei Technologies Ltd. : www.huawei.com
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