Huawei’s revenue in the first quarter fell as smartphone sales plummeted
Huawei’s smartphone business has suffered from US sanctions that restrict it from buying chips and other components from key suppliers.
Cost photo | Future Publishing | Getty pictures
BEIJING – Chinese telecommunications giant Huawei announced on Thursday that revenues in the first quarter fell by almost 1[ads1]4% from a year ago, while the profit margin was more than halved.
“Our consumer business was strongly affected, and ours [information and communications technology] Infrastructure business experienced steady growth, “said Ken Hu, Huawei’s rotating chairman, in a statement.” In 2022, we still face a challenging and complicated business environment. “
The company reported 131 billion yuan ($ 20.63 billion) in revenue for the first quarter. This is a decrease of 13.9% from the same period last year, and a decrease of more than 27% from the fourth quarter of 2021.
The profit margin in the first quarter of 4.3% was less than half of the 11.1% reported a year earlier.
Hu said that the quarterly results were in line with the company’s expectations and that Huawei has increased its investments in research and development.
Huawei’s smartphone business has suffered under US sanctions. The Trump administration put the company on a blacklist that limits it from buying critical components such as advanced semiconductors from US suppliers.
Smartphone sales across China fell by 14% in the first quarter from a year ago, according to Counterpoint Research.
Huawei registered the worst decline of seven brands, ranked sixth by market share and sales fell by 64.2% from the previous year, the report showed. The company’s smartphone sales in China also fell by 12% from the previous quarter.
Apple was the only other company on the list to have a quarter-on-quarter decline in sales in China, down 23%, according to Counterpoint. However, the iPhone manufacturer’s sales in China continued to grow by 4.4% in the first quarter from a year ago.
Looking at other companies
Huawei has focused on hiring talent and developing other business lines to counteract the effects of declining smartphone sales.
In particular, while the company said it will not build its own cars, Huawei has entered the hot electric car market by incorporating the HarmonyOS operating system and other technology into cars manufactured by traditional Chinese car brands.
Rotating chairman Hu said earlier this week that at least two more car models using Huawei technology will be launched this year. The first car to use the HarmonyOS was the Aito M5, which was delivered earlier this year.
Huawei said the smart car research and development team has reached 5,000 people, and that the company’s investment in automotive technology-related operations reached $ 1 billion last year.
