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SHENZHEN, China – Chinese telecommunications giant Huawei Technologies reported its biggest drop in revenue in the first half of 2021, after US sanctions pushed it to sell part of its once-dominant handset business and before new areas of growth have not reached full maturity.
The company generated revenue of 320.4 billion yuan ($ 49.56 billion), it said on Friday.
The biggest drop came from Huawei’s consumer business group, which includes handsets, whose revenues fell 47% to 135.7 billion yuan.
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It saw a 0.6 percentage point increase in its net profit margin to 9.8%, largely due to efficiency improvements, a company spokesperson said.
In 2019, former US President Donald Trump put Huawei on an export blacklist and banned it from accessing critical US-sourced technology, which affected its ability to design its own chips and components. from external suppliers.
Chinese telecoms giant Huawei Technologies reported its biggest drop in revenue in the first half of 2021, after US sanctions pushed it to sell off some of its once-dominant handset business and before new areas of growth failed. have reached full maturity. (iStock)
Sanctions have hampered Huawei’s cellphone business, with Huawei dropping the top five suppliers in China for the first time in more than seven years in the second quarter, shipping 6.4 million units, according to consulting firm Canalys .
This compares to the 27.4 million handsets shipped to China in Q2 2020, excluding Honor budget handset shipments. Huawei sold the brand in November.
The consumer business generated more than half of the company’s turnover in 2019.
Revenue from Huawei’s telecommunications equipment business also fell 14% in the first half of the year, which a spokesperson said was in part due to the slowdown in the rollout of 5G in China.
Huawei is trying to move towards software and business areas that are not likely to come under pressure from the United States, according to an internal memo from founder and CEO Ren Zhengfei seen by Reuters in May.
“Our goal is to survive and do so in a sustainable manner,” Eric Xu, Huawei’s rotating chairman, said in a earnings statement. “We have set our strategic goals for the next five years.”
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The company started rolling out its Harmony operating system in June, meaning it no longer relies entirely on Google’s Android platform.
U.S. sanctions have banned Google from providing technical support for new phone models.
Huawei group of companies’ first-half revenue rose 18% to 42.9 billion yuan, as the COVID-19 outbreak boosted industry demand for ICT connectivity, said said a spokesperson.
Huawei is also experiencing strong growth in its cloud services business, which more than doubled in size in the first quarter to take a 20% market share in China, according to Canalys.
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