Chinese tech giant Huawei is still going through tough times. The rotating CEO of the company, Eric Xu, assured this Friday that the company’s objective “is to survive and do so in a sustainable way” after announcing that revenues have fallen by 29.4% in the first half of the year compared to same period of 2020, reaching 454,000 million yuan (59,330 million euros). The sharp decline was mainly due to the decline in its consumer business, due to the trade restrictions imposed by the United States.
The company’s net profit margin at the end of June stood at 9.8% compared to 9.2% in the first half of 2020, the highest since the US sanctions were imposed in March 2019.
The consumer segment, which includes sales of smartphones , registered a 46.95% drop in its turnover between January and June, falling to 135.7 billion yuan (17.763 billion euros). Huawei already warned at the end of April that its consumer businesses had reduced their turnover due, in part, to the fact that it sold its low-cost phone subsidiary Honor to a public consortium so that it could evade the limitations imposed by the US sanctions.
The carrier business reported revenue of 136.9 billion yuan (17.89 billion euros), down 14.2%, apparently due to China Mobile delaying its 700 MHz 5G tender until mid-July. For its part, the business business had a turnover of 42.9 billion yuan (5,606 million euros), 18.2% more, thanks to digital services and the growth of its business in the cloud.
Xu indicated that the results were in line with the company’s forecasts and said that “despite a decrease in the income of our consumer business, caused by external factors, we are confident that our businesses of operators and companies will continue to grow in a manner keep going”.
The executive acknowledged that the company faces difficult times, but added that “it continues to believe deeply in the power of digital technology to provide new solutions to the problems facing the world at the moment.”
In May 2019, the company was included by the US Government in a list of entities that are prevented from commercial agreements with entities in this country. A fact that caused Huawei phones to not be able to use the Android operating system or other popular Google services, such as Gmail or Google Maps. This led the Chinese company to create its own operating system, HarmonyOS. Huawei is also restricted from acquiring advanced chips. The Chinese manufacturer claims that more than 50 million users have already switched to HarmonyOS 2 since its launch in June.
Huawei’s mobile business has not only suffered outside of China. Also in your country, your sales have fallen. According to Canalys, in the second quarter the company was out of the top 5 manufacturers in the country, the first time this has happened in more than seven years, according to Efe.
Despite the business cutback, a Huawei spokesperson has assured Mobile World Live that the company has no plans to cut staff or reduce the foreign markets in which it is present, and said they plan to continue with their current strategy.
The company, which has begun to diversify into new sectors such as smart vehicles, began offering vehicles in its Chinese stores with the goal of selling 300,000 cars by 2020, reports this outlet. If a year ago its consumer division represented 56% of Huawei’s revenue, the figure has fallen to 42.4% in the first half of 2021. Today the first business unit is its business to operators, which represents 42.7%.
The Great Writer and The Passionate Poet As Well, He Graduated from University Of Florida in Journalism and Brad have around 12 years of experience in news and media section.