Huawei’s first quarter income tumbles as smartphone gross sales plunge

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Huawei’s smartphone enterprise has struggled underneath U.S. sanctions that prohibit it from shopping for chips and different elements from key suppliers.

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BEIJING — Chinese language telecommunications big Huawei introduced Thursday that first quarter income fell by practically 14% from a yr in the past, whereas its revenue margin greater than halved.

“Our shopper enterprise was closely impacted, and our [information and communications technology] infrastructure enterprise skilled regular progress,” Ken Hu, Huawei’s rotating chairman, mentioned in a press release. “In 2022, we nonetheless face a difficult and sophisticated enterprise atmosphere.”

The corporate reported 131 billion yuan ($20.63 billion) in income for the primary quarter. That is down by 13.9% from the identical interval final yr, and a greater than 27% decline from the fourth quarter of 2021.

First quarter revenue margin of 4.3% was lower than half the 11.1% reported a yr earlier.

Hu mentioned the quarterly outcomes had been in step with the corporate’s expectations and that Huawei has elevated its funding in analysis and improvement.

Huawei’s smartphone enterprise has struggled underneath U.S. sanctions. The Trump administration put the corporate on a blacklist that restricts it from shopping for important elements reminiscent of superior semiconductors from U.S. suppliers.

Smartphone gross sales in China throughout completely different manufacturers fell by 14% within the first quarter from a yr in the past, in line with Counterpoint Analysis.

Huawei logged the worst decline out of seven manufacturers, rating sixth by market share and with gross sales plunging by 64.2% from a yr earlier, the report confirmed. The corporate’s smartphone gross sales in China additionally fell by 12% from the prior quarter.

Apple was the one different firm on the listing to put up a quarter-on-quarter gross sales decline in China, down by 23%, in line with Counterpoint. Nevertheless, the iPhone maker’s China gross sales nonetheless grew by 4.4% within the first quarter from a yr in the past.

Trying to different companies

Huawei has emphasised hiring expertise and growing different enterprise strains to counter the impression of falling smartphone gross sales.

Specifically, whereas the corporate mentioned it won’t construct its personal automobiles, Huawei has entered the recent electrical automobile market by incorporating its HarmonyOS working system and different know-how into automobiles manufactured by conventional Chinese language auto manufacturers.

Rotating chairman Hu mentioned earlier this week that a minimum of two extra automobile fashions utilizing Huawei know-how could be launched this yr. The primary automobile to make use of HarmonyOS was the Aito M5, which started deliveries earlier this yr.

Huawei mentioned its analysis and improvement staff for sensible autos has reached 5,000 folks, and that the corporate’s funding in auto tech-related operations reached $1 billion final yr.

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