Huawei Revenue Sags Under Weight of U.S. Sanctions
What’s new: Embattled telecoms giant Huawei Technologies Co. Ltd. on Wednesday reported revenue of 152.2 billion yuan ($23.5 billion) in the first quarter of 2021, down 16.5% from the same period a year earlier.
It said business for its core networking equipment unit remained steady during the period. But revenue was down for its consumer devices unit that is centered on smartphones. Huawei blamed part of that decline on the sale in November of its lower-end Honor smartphone brand.
“2021 will be another challenging year for us, but it’s also the year that our future development strategy will begin to take shape,” said Eric Xu, Huawei’s rotating chairman. “No matter what challenges come our way, we will continue to maintain our business resilience.”
Background: Huawei was one of China’s earliest global high-tech success stories, before losing access to many of its key suppliers following a steady stream of sanctions by the administration of former U.S. President Donald Trump. Those actions were part of a broader Trump campaign to stymie China’s high-tech development, and current U.S. President Joe Biden has shown no signs of rolling back sanctions.
Huawei’s latest quarterly revenue decline would have been unthinkable two years ago before the U.S. campaign began. The latest 16.5% decline represented an acceleration from an 11.3% revenue drop for the company in last year’s fourth quarter, according to calculations by Caixin using previously released company data.
Huawei was briefly the world’s top smartphone maker, but lost the title in the second half of last year as the effect of U.S. sanctions forced it to sharply scale back its production. By the end of 2020 the company had slipped to world’s fifth biggest smartphone brand.
Quick Takes are condensed versions of China-related stories for fast news you can use. To read a Huawei press release with its latest results, click here.
Contact reporter Yang Ge (firstname.lastname@example.org)
Support quality journalism in China. Subscribe to Caixin Global starting at $0.99.
Follow the Chinese markets in real time with Caixin Global’s new stock database.
- MOST POPULAR