Huawei’s Q1 revenue plummets as smartphone sales tumble
Huawei’s smartphone business has struggled under US sanctions that prevent it from buying chips and other components from key suppliers.
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BEIJING (Reuters) – Chinese telecommunications giant Huawei said on Thursday first-quarter revenue fell nearly 14% from a year ago, while its profit margin more than halved .
“Our consumer business has been heavily impacted, and our [information and communications technology] the infrastructure business has seen steady growth,” Ken Hu, rotating chairman of Huawei, said in a statement. “In 2022, we still face a difficult and complicated business environment.
The company reported revenue of 131 billion yuan ($20.63 billion) for the first quarter. That’s down 13.9% from the same time last year and down more than 27% from the fourth quarter of 2021.
The 4.3% profit margin in the first quarter was less than half of the 11.1% recorded a year earlier.
Hu said the quarterly results were in line with the company’s expectations and that Huawei had increased its investment in research and development.
Huawei’s smartphone business has struggled under US sanctions. The Trump administration has placed the company on a blacklist that prevents it from buying critical components such as advanced semiconductors from US suppliers.
Sales of smartphones in China from various brands fell 14% in the first quarter compared to a year ago, according to Counterpoint Research.
Huawei recorded the worst drop out of seven brands, ranking sixth in market share and with sales down 64.2 percent from a year earlier, according to the report. The company’s smartphone sales in China also fell 12% from the previous quarter.
Apple was the only other company on the list to post a quarter-over-quarter sales decline in China, down 23%, according to Counterpoint. However, the iPhone maker’s sales in China still rose 4.4% in the first quarter from a year ago.
Looking for other companies
Huawei has been emphasizing hiring talent and developing other business areas to counter the impact of declining smartphone sales.
In particular, while the company said it would not build its own cars, Huawei entered the electric car market by integrating its HarmonyOS operating system and other technologies into cars made by Chinese auto brands. traditional.
Turning Chairman Hu said earlier this week that at least two more car models using Huawei technology would be launched this year. The first car to use HarmonyOS was the Aito M5, which began shipping earlier this year.
Huawei said its research and development team for smart cars numbers 5,000 people and the company’s investment in car technology operations reached $1 billion last year.