Technology

Huawei chairman says the ‘aim is to survive’ as revenue slides 29%

A mobile phone shows Huawei app interface. Huawei unveiled HarmonyOS, its own operating system in 2019. In June 2021, the company launched the operating system on a smartphone for the first time.

Costfoto | Barcroft Media | Getty Images

The chairman of Huawei said the Chinese technology company’s “aim is to survive” as revenue fell almost 30% in the first half of the year.

The Shenzhen-headquartered company, which was put on the U.S. trade blacklist in 2019, announced Friday that it generated 320.4 billion yuan ($49.6 billion) in revenue in the first half of 2021. It’s a significant fall from the 454 billion yuan that Huawei recorded in the first half of 2020.

Huawei said its profit margin grew 0.6% to 9.8%, largely as a result of efficiency improvements, and added that the overall performance was in line with forecasts.

Eric Xu, Huawei’s rotating chairman, said in a statement that the company had set its strategic goals for the next five years.

“Our aim is to survive, and to do so sustainably,” he said.

Former U.S. President Donald Trump put Huawei on an export blacklist in 2019, a move that prevents American firms from doing business with it. For instance, Google was no longer allowed to license its Android mobile operating system to Huawei.

The blacklist blocks U.S. companies from selling or transferring technology to Huawei unless they are granted a special license. It has hampered Huawei’s ability to design its own chips and source other components.

Xu said in April that Huawei has ramped up its research and development investment as part of its efforts to “keep the company afloat, to address supply continuity challenges caused by U.S. bans, and to pursue sustainability well into the future.”

‘Challenging times’

Huawei’s business is split into three subdivisions: carrier, enterprise and consumer.

Huawei said year-on-year revenue for the consumer business dropped to 135.7 billion yuan from 255.8 billion yuan, blaming the decline on the sale of its Honor business at the end of 2020.

Its carrier business, which sells 5G and other telecommunications infrastructure, saw first-half revenue slip to 136.9 billion yuan from 159.6 billion yuan in the first half of 2020.

Huawei said the carrier business grew steadily outside China in the first half of the year. However, in China, which is its largest market by far, the company said it was affected by delays in the 5G network rollout. Huawei said it expects the carrier business to continue to grow steadily over the next six months thanks to 5G efforts from China Mobile, China Broadcasting Network, China Telecom, and China Unicom.

First-half revenue at the enterprise division increased to 42.9 billion from 36.3 billion yuan in the first half of 2020, Huawei said.

The enterprise business achieved higher growth outside China than in its domestic market, Huawei said, adding that it will continue to remain the “most promising growth engine” for the company this year.

“Despite a decline in revenue from our consumer business caused by external factors, we are confident that our carrier and enterprise businesses will continue to grow steadily,” Xu said.

He added: “These have been challenging times, and all of our employees have been pushing forward with extraordinary determination and strength. I want to thank every single member of the Huawei team for their incredible effort.”

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