Huawei Technologies has suffered a nearly 29% drop in revenue for 2021, as the Chinese company continues to fight a lengthy US crackdown that has blocked its use of US technology.
In 2021, Huawei’s revenue fell 28.9% to 634 billion yuan, or about 88 billion euros for the year, the company said. This is an unusual drop in annual revenue for the once-booming tech company. The 2019 US sanctions have hit Huawei hard, who warned that she would be faced with ” serious challenges “In 2022 in a context of” politicization of technology “And continuation of the” de-globalization “.
In his New Year’s letter to employees, Huawei’s rotating chairman Guo Ping nonetheless said his telecom business has remained “ stable ” and ” its overall performance is in line with expectations “. It therefore seems that the decrease in turnover is largely due to the decline in smartphone sales. From January to September 2021, Huawei had already recorded a 32% drop in turnover over one year.
Huawei sells fewer smartphones because of the US embargo
Since the sanctions imposed by the Trump administration began in 2019, Huawei has been deprived of American technologies, which greatly complicates the manufacture of smartphones. At the start of 2021, Huawei was also ejected from the top 5 of the best smartphone sellers, while the Chinese manufacturer had previously managed to reach first place ahead of Apple and Samsung.
Huawei also recorded a 16.5% drop in smartphone sales in the first quarter of 2021 after the sale of Honor, its now independent subsidiary. Thanks to this maneuver, Huawei had managed to escape Honor from sanctions, since the manufacturer can now use American technologies and install Google applications on its devices.
Huawei looks to the future and intends to take revenge on smartphones
According to Guo Ping, the digital transformation of global economies has become a major engine of growth. The president of Huawei believes that there are new opportunities in green and low carbon technologies, but still announced that 2022 will be a complicated year for the company. ” The year 2022 will bring its share of challenges, but we will continue to work closely with our global partners to overcome the challenges we face, improve business performance and strengthen our foundations…. In the end, we will not just survive, but we will do so in a sustainable way. Guo Ping said.
We know that Huawei has developed a strategy to circumvent US sanctions in the coming years. The Chinese giant intends in particular to launch its own 5G chips to equip its phones, which are without technology for more than two years nows. Indeed, we learned a few months ago that the manufacturer was thinking of obtaining Chinese 5G RF chips to allow its smartphones to be compatible with 5G networks, without using American technologies.
The Chinese maker is also reportedly considering keeping its smartphone business afloat by allowing third-party companies to purchase U.S. components and design phones on its behalf. That allowed Huawei to affix its logo on finished devices, although the company did not design the smartphones itself.
Huawei is also banking on its other business sectors to stay afloat
In addition to smartphones, Guo Ping said Huawei will continue to increase its investment in research and development and global recruitment. The company also announced that it would promote Euler, its commercial Linux distribution, as the basis of a software ecosystem for digital infrastructures such as servers.
This echoes efforts to evolve Harmony, Huawei’s best-known operating system for devices like smartphones. Huawei plans to deploy its alternative to Android in Europe from 2022. Huawei is also investing heavily in the automotive market, notably with HarmonyOS Smart Cockpit, its own car OS that will compete with Android Auto, or even on the Cyrus SF5, the first electric car from the Chinese manufacturer.
Source: Huawei Central