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Huawei reports slow growth due to US ban and pressure on consumer business

Huawei has finally started seeing its business slow down due to lack of access to American technologies. The company has not revealed impact of Coronavirus yet.

  • Published: April 1, 2020 5:32 PM IST
Huawei Stock Photo MWC Huawei Ban

Huawei is finally facing the heat of trade ban imposed by the US Department of Commerce. The Chinese telecommunications giant reported slowing profit growth in 2019 due to the ban. The company revealed the details while announcing revenue for last year. Huawei reported total revenue of RMB 858.8 billion, a year-on-year increase of 19.1 percent. The net profit came in at RMB 62.7 billion, which was a gain of 5.65 percent from last year. Also Read - Huawei EMUI 10.1 announced with MeeTime, Celia assistant and multi-screen collaboration: Check out roll out and compatible devices

Huawei reported profit growth of 25 percent in 2018 and 28 percent in 2017. The company also did not detail the impact from Coronavirus outbreak on its business. In an interview with CNBC, Eric Xu, rotating chairman of Huawei, told the company missed its own targets. The Chinese technology giant had projected revenue of RMB 858.8 billion at the start of thus year. While it has ended with that projection, it could have been better. Also Read - Huawei P40 Pro is the new leader in DxOMark rankings for main camera and selfie camera but does that matter

The company was reportedly planning to increase its projected revenue for 2019 higher in April. However, it dropped the plan due to tensions due to US-China trade war. The company was put on the US Entity List in May last year. This restricted the company from working with American technology companies. Xu blamed the blacklisting for missing the revenue target by around $12 billion. Also Read - Huawei Smart TV to launch on April 8; will bring big pop-up module: Check details

“We didn’t meet our revised targets, which was the $135 billion mark. We were short by $12 billion. This was the results of the US sanctions,” Xu told CNBC on Tuesday. “We had to deal with the challenges around the supply continuity and we had to address the supply challenges in the short term, so as to supply certain products to our customers. And we also had to increase our R&D (research and development) investment,” Xu added.

Since May last year, Huawei has faced a tough year and has seen blowback in other countries as well. The company has been repeatedly scrutinized in markets like Europe and the UK. It has also lost critical business in some of the key markets. However, the weakness seems to have come in the mobile business. Huawei was on track to become the leading smartphone maker in the world. However, the lack of Google services on its mobile devices, restricted the company from expanding its market share. “It is the consumer business of Huawei that was hurt the most,” Xu said.

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  • Published Date: April 1, 2020 5:32 PM IST


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