Huawei’s Smartphone Business Remains Crippled Due to US Sanctions, Revenue Slides in Q3

China’s Huawei’s revenue declined 38 percent in the third quarter compared to the same period a year ago, with US sanctions keeping its smartphone business and new potential growth areas still in their infancy.

The Chinese telecom giant on Friday posted revenue of CNY 455.8 billion (about Rs 5,34,064 crore) in the first three quarters, nearly a third lower in the same period a year ago, with a profit margin of 10.2 per cent.

Revenue for the third quarter alone came in at CNY 135.4 billion (about Rs 1,58,649 crore), based on Reuters calculations.

The performance was “in line with forecast”, said rotating chairman Guo Ping.

former US president Donald Trump Keep Huawei On an export blacklist in 2019 and prevented it from accessing critical US-origin technology, hindering its ability to design its own chips and source components from outside vendors.

The sanctions have severely affected Huawei’s handset business, with rotating president Eric Xu saying in September that revenue from smartphones fell by about $30 billion (about Rs 2,24,828 crore) this year to $40 billion (about Rs 2,99,770 crore). Rs.) will be .

Although Huawei did not break down the third quarter numbers by business segment, the company said the decline was mainly attributed to its consumer business.

According to Counterpoint Research, Huawei captured an 8 percent share of China’s smartphone market in the third quarter, down from 30 percent a year ago.

On the other end, Respect, formerly a sub-brand that Huawei sold last November to keep it alive, sold 96 percent more phones in the same quarter than a year ago, grabbing 15 percent of China’s market, Counterpoint reported. said.

Huawei is looking to develop new growth revenue streams outside of base station infrastructure and handsets with cloud business and smart ports, mining and smart electric vehicles business.

It launched in June harmony Operating system on smartphones, and wants to supply software to auto companies.

But these new lines will take some time to bear fruit, officials said.

However, the company has been given a boost by the return of its chief financial officer and the daughter of its founder, Ren Zhengfei. Meng Wanzhou returned to work at his headquarters in Canada on Monday, nearly three years after fighting extradition to the US, with Chinese officials indicating that the case against him had been dropped to help end a diplomatic standoff.

© Thomson Reuters 2021