Huawei Revenue Drops 29% As The Effect Of The U.S Blacklist Continues To Weigh In

On Friday, Chinese telecommunications company Huawei Technologies released results for revenue. The company revealed that it generated revenue of 320.4 billion yuan ($49.56 billion).

The telecoms giant witnessed its revenue plummet by almost one-third in the first half of this year and is a result of the sanctions that it continues to face from the U.S. government. Huawei Technologies was once one of the dominant smartphone brands in the market but has been sharply replaced by other brands such as Xiaomi, Oppo, and Vivo, after its kerfuffle with the U.S. government. Its once-dominant smartphone business and other businesses which were majorly infantile were gravely affected by the U.S. government’s decision.

The smartphone used-to-be-giant saw its largest drop come from its consumer business group which covers its mobile phones. The company’s revenue dropped 47 percent to 135.7 billion yuan.

With the challenges and difficulties it faced, the company was able to see a 0.6 percent increase to 9.8 percent and according to a spokesperson from the company, the increase was a result of efficiency improvements.

Huawei’s troubles started in 2019 after former U.S President Donald Trump barred the Chinese technology company from having access to critical technology of U.S. origin. This affected Huawei’s production making it handicapped and unable to design its chips and source components from external vendors predominantly in the U.S.

Huawei which held the position of second-largest vendor after Samsung before the U.S. government ban has been replaced by Xiaomi Corp. As a result of the sanctions, Huawei has been taken out of the list of the top five Chinese smartphone vendors, the first time in seven years.

As a way of salvaging its failing business, the company has started to shift towards other business areas, such as software, that are immune to the U.S. ban. According to what the company’s CEO and founder Ren Zhengfei said in May, the company will save itself by exploring other businesses that are unaffected by the U.S. ban.

A statement by the company’s rotating chairman Eric Xu, “We’ve set our strategic goals for the next five years. Our aim is to survive, and to do so sustainably.” The company stopped being dependent on Google Android OS and announced that it was launching its OS called Harmony OS.

According to a company’s spokesperson, although the company’s business has suffered some challenges, Huawei’s enterprise business group jumped 18% to 42.9 billion yuan, and this was because the pandemic pushed the industry demand for ICT connectivity. It cloud services business also saw some impressive growth. It now has a 20 percent market share in China, according to Canalys. Although it may not be the giant it used to be, Huawei is making impressive efforts at getting back on its feet.

Previous Post

Kenya’s Wapi Pay Raises $2.2m Non-equity Pre-seed Led By Nubank Investors

Next Post

South Africa’s Naked Raises $11m In Series A Round To Increase The Reach Of Its Insurance Products

Related Posts