April 25, 2024

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Huawei’s revenue declines in the first quarter as smartphone sales decline

Huawei's revenue declines in the first quarter as smartphone sales decline

Huawei’s smartphone business has struggled with US sanctions that prevent it from buying chips and other components from major suppliers.

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BEIJING – Chinese telecom giant Huawei announced Thursday that first-quarter revenue fell about 14% from a year ago, while its profit margin fell by more than half.

“Our consumer activity has been affected significantly, our business has been affected [information and communications technology] Ken Ho, the rotating chairman of Huawei, said in a statement that the infrastructure business has seen steady growth. “In 2022, we continue to face a challenging and complex business environment.”

The company reported revenue of 131 billion yuan ($20.63 billion) in the first quarter. This is a 13.9% decrease from the same period last year, and a decrease of more than 27% from the fourth quarter of 2021.

The first-quarter profit margin of 4.3% was less than half of 11.1% a year earlier.

Hu Jintao said the quarterly results are in line with the company’s expectations and that Huawei has increased its investment in research and development.

Huawei’s smartphone business has faced difficulties under US sanctions. The Trump administration has put the company on a blacklist that prevents it from buying critical components such as advanced semiconductors from US suppliers.

Smartphone sales in China across various brands fell 14% in the first quarter of last year, according to Counterpoint research.

The report showed that Huawei recorded the worst decline among seven brands, ranking sixth in terms of market share with sales down 64.2% from the previous year. The company’s smartphone sales in China were also down 12% from the previous quarter.

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apple It was the only other company on the list to report a decline in sales on a quarterly basis in China, down 23%, according to Counterpoint. However, the iPhone manufacturer’s sales in China still grew by 4.4% in the first quarter of last year.

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Huawei emphasized talent recruitment and Other business lines development To counteract the impact of declining smartphone sales.

In particular, while the company said it would not make its own cars, Huawei entered the hot electric car market by integrating its HarmonyOS operating system and other technologies into cars manufactured by Chinese traditional car brands.

Rotating President 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 HarmonyOS was Aito M5, which began deliveries earlier this year.

Huawei said its research and development team for smart cars has reached 5,000 people, and the company’s investment in operations related to automotive technology reached $1 billion last year.