Huawei Technologies recorded a slight annual profit growth last year. This modest growth arrived as the company saw a decline in its overseas revenue due to the impacts of the coronavirus pandemic and affects of the US sanctions.

According to a Reuters report, the Chinese tech giant’s net profit for the year 2020 came in at 64.6 billion Yuan (roughly 9.83 billion US Dollars). This marks a rise of about 3.2 percent compared to the smartphone vendor’s 5.6 percent growth from a year prior. Back in 2019, Huawei was placed on the US export blacklist, the Entity List, which banned the company from acquiring crucial technology that originated from the US.

This affected the company’s ability to design its own chip or source components from outside vendors as well. Furthermore, the ban led to increasing pressure against the vendor’s smartphone business, with Huawei even selling off its budget smartphone unit to a Chinese consortium of agents and dealers back in November 2020. Despite the various obstacles, the company still managed to register a 3.3 percent year on year growth in consumer business, which accounted for over half of its revenue.

This growth was partly due to the company’s growth in other product ranges like smartwatches and laptops. Similarly, even its telecommunications unit, which includes its 5G networking equipment, saw a rise of 0.2 percent as well last year. Most of Huawei’s growth was primarily driven by its home market, with revenue from China rising up to 15.4 percent in 2020. Meanwhile, its revenue from Europe, the Middle East and Africa falling by 12.2 percent, while its revenue from Asia falling by 8.7 percent and down by 24.5 percent in the Americas.

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Huawei is seeing a sharp decline in its growth as the impacts of the US sanctions take hold. In the third quarter, the company saw its margins dip as the reinforced regulation disrupt its operations.

According to a CNBC report, the Chinese tech giant had brought in 217.3 billion yuan (roughly 31.91 billion US Dollars) in revenue in September 2020. This marks a slight growth of 3.7 percent from 209.5 billion yuan from last year (roughly 31 billion US Dollars). The first nine months combined had the company bring in 671 billion yuan (roughly 98.57 billion US Dollars) in revenue, which marks a growth of 9.9 percent from the same period last year.

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This showcases a significant slowdown in growth as the first nine months of 2019 had the Chinese smartphone maker sees revenue growth of 24.4 percent over 2018. Furthermore, Huawei’s net profit margins were 8 percent for the first nine months, which was also lower than the 8.7 percent from back in 2019. The effects of the recent US sanctions are clearly showing its effects on the consumer electronics brand.

For those unaware, Huawei was placed on the Entity List back in 2019, and since then faced various pressures from Washington. The ban had also caused the company to lose Google support for its Android smartphones. This meant that its overseas smartphone business fell sharply during, despite its home market still thriving. Additionally, losing its primary chip supplier TSMC was another major blow to the company earlier this year.

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Back in early 2019, Huawei had been hit with a ban from the US, that placed the company in the “Entity List.” Since then, the company’s operations have been severely hampered while it has also lost support from Google, due to the blacklist. While the company did launch its own alternatives, it seems the transition wasn’t as simple as they wished, with the company reportedly losing out on billions of dollars.

According to Eric Xu, the Deputy Chairman and Rotating Chairman of Huawei, the company has lost out on nearly 12 billion US Dollars in 2019. Apparently, Huawei’s previous projections regarding the year had an estimated 135 billion US Dollars. However, the company has fallen just short of the amount, which was directly related to the various “US sanctions” that were against the Chinese tech giant.

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A major chunk of the shortfall arrived from Huawei’s consumer division that accounts for over 54 percent of the company’s total sales in 2019. Xu stated that “it is the consumer business of Huawei that was hurt the most.” In other words, smartphones, tablets, laptops and more were affected by the US blacklisting. Reportedly, these consumer grade electronics products brought in 66.93 billion US Dollars in revenue in 2019, which was about 10 billion US Dollars less than what the company was originally targetting.

For those unaware, after the US ban, Huawei could not trade or buy products/services from US based companies. This caused it to lose Google’s mobile services, which in turn meant that Huawei smartphones now had to ship with vanilla Android. Thus, this caused the development of the HMS (Huawei Mobile Services), but unfortunately, the platform is still in its nascent stages. Huawei’s partnership with Google also meant that both companies profited greatly from one another, but that has since been terminated.

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(Via)

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Huawei has announced its result for the first half of this year, showing promising results. In a statement published today, the Chinese mobile giant disclosed that the company’s revenue within the period is estimated at about 245.5 billion yuan (about $37 billion) which is an estimated increase of 40% growth in revenue.

The statement did not disclose the results from the different divisions of the multidimensional Huawei Technologies and news about that is expected in coming days.

It is on record that Huawei achieved a total revenue of about 395 billion yuan last year, with the Consumer Business Group division comprising smartphones, smartwatches, laptops  and others making up about 129.1 billion yuan of the entire amount.

According to Yu Chengdong, Chief Executive Officer of Huawei Consumer Business Group, Huawei’s ultimate goal is to overtake Samsung and Apple as the largest smartphone maker globally. Samsung and Apple presently occupy the first two positions as the highest revenue generating smartphone companies in the World, Huawei comes in at third position.

Huawei is targeting an overall revenue of $75 billion for the entire year, and that figure has almost been halved by this H1 result. The company is hoping that with the release of it Honor 8 flagship and other devices expected to hit the market during the second half of the year, sales of its devices would drive a rise in revenue such that earning might even surpass the targeted amount.

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In this competitive world, R&D forms the backbone of any tech company. In order to stay ahead of the competition, companies have to incorporate cutting edge technology in their products in order to differentiate them from the masses.

We know that major tech companies spend billions of dollars every year on R&D and today, we have some idea about what each of the top tech companies spends in this department.

According to a recent report from Bloomberg Businessweek, Apple spends just about 3.5% of its revenue on R&D which is a pretty small figure as compared to other tech companies. For example, Google spends about 15% of its revenue in this department, while Facebook and Qualcomm spend around 22% and 21% respectively.

When it comes to Chinese tech giant, Huawei, it’s around the same figure as Google. The company reportedly spends around 14.2% of its revenue in R&D.

However, this is the percentage of revenue spent. When it comes to the total amount spent, Apple, even with its meagre 3.5% manages to spend about $8.15 billion in R&D, greater than Huawei, Facebook or Qualcomm.

In terms of total amount of money spent, Huawei spends around $6.5 billion in this department. This is greater than both Facebook and Qualcomm’s figures of $2.6 and $5.56 billion respectively. In comparison, Google spends about $9.9 billion.

Huawei’s CEO Yu Chengdong had said that the company’s smartphones will surpass Samsung next year and if that has to happen, the company will need to spend a lot of R&D this year. So, this figure could increase significantly in 2015.

So, do you think Huawei can surpass Samsung in the next couple of years?

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