Huawei on Wednesday announced a 16.5% year-on-year drop in first-quarter revenue, while the Chinese telecoms giant remains penalized by US sanctions. The group achieved in the first quarter a turnover of 152.2 billion yuan (19.4 billion euros or 23.4 billion dollars).
However, a year earlier in this period, it was up 1.4% to 182.2 billion yuan (23.26 billion euros today). In question, the decline in sales of its smartphones, which the manufacturer attributes to the sale of Honor, an entry-level smartphone brand from which it separated in November.
But also, the sanctions during the Trump presidency disrupted his plans. To remedy this, the giant has just announced the launch of a new offer on cloud services in order to recover margins through this activity.
The group’s net profit margin is also growing by 3.8%, against + 11.1% a year earlier. This has been preserved by its policy of cost reduction and the payments of these licenses in royalties (600 million dollars).
It prevents. “2021 will be another difficult year” for Huawei, warned the group’s incumbent chairman Eric Xu in a statement.
The group based in Shenzhen (southern China) has been at the center of the Sino-American rivalry for several years, against the backdrop of a trade and technological war between the two leading world powers.
The consequences of the Trump era
Huawei had found itself in the crosshairs of the former Trump administration, which accused it, without providing any evidence, of potential espionage for the benefit of Beijing.
Consequence: in 2019 the United States placed the group on a blacklist in order to prevent it from acquiring “made in USA” technologies, in particular chips, which are essential to its products.
“Whatever challenges we face, we will remain resilient. Not just to survive, but to last,” Xu promised.
Due to US sanctions, Honor was struggling to source electronic components.
Huawei, the world leader in 5G equipment, a new standard in mobile technologies set to revolutionize the internet, is also facing increasing pressure on this front.
The Trump administration hammered that Chinese intelligence could use Huawei’s equipment to monitor a country’s communications and data traffic.
In February, Huawei founder Ren Zhengfei, however, wanted to reassure the group’s “survival”, but called on the Biden administration for “a policy of openness” after the blows of the Trump era.
Pressure from Washington weighed on Huawei’s results last year. Unlike 2019, the group has not released in detail the number of phones it sold last year.