First-quarter revenues at China’s sanctions-hit Huawei Technologies fell 13.9% from a year earlier, as the company pledged to develop 5G technology, cloud computing and energy efficiency to offset its declining smartphone business.
The Chinese telecoms giant posted revenue of 131 billion yuan ($19.9 billion) in the first quarter – a significant drop from 152.2 billion yuan a year earlier. But the results were in line with forecasts, Huawei’s rotating chairman Ken Hu said.
“Our consumer business was heavily impacted, and our [information and communication technology] infrastructure business experienced steady growth,” Hu said.
In 2019, the US placed Huawei on an export blacklist barring it from accessing critical technology, hurting its ability to design chips and source components from outside vendors.
A Huawei spokesperson said the company has taken measures to meet consumer demand for smartphones.
“Consumers can purchase Huawei smartphones more readily now, including the latest best-selling models,” such as its flagship P50 and Nova series, the spokesperson said, without giving further details on chip and component supplies.
Huawei held just 6.2% of the China handset market in the first quarter, research firm Counterpoint Research said on Thursday. In the same quarter, Honor, a unit Huawei sold in December 2020, saw its market share rise to 16.9%.
Huawei’s first-quarter net profit margin also fell 6.8 percentage points from a year earlier to 4.3%, a drop the company said was due to increased research and development spending and investments in business continuity, as well as the drop in revenue.
The company spent 142.7 billion yuan, or 22.4% of its total revenue, on R&D, it said in its 2021 annual report last month.
- Reuters, with additional editing by George Russell