Revenue growth for Chinese telecommunications equipment maker Huawei fell dramatically in 2020 as overseas sales shrank in the wake of US sanctions and disruptions caused by the Covid-19 pandemic, the company reported on Wednesday.
Why it matters: The decline comes as Huawei’s revenues shrank in all markets but China. Huawei was placed on a US trade blacklist in 2019, blocking the company from sourcing US-made components without permission.
- Huawei has faced pushback across international markets as countries around the world place restrictions on rolling out the company’s telecommunications equipment.
- Huawei’s smartphone sales have fallen drastically since the ban. In the fourth quarter of 2020, Huawei shipped just 33 million handsets globally, down 41% year on year, data from Counterpoint Research showed.
Details: Huawei’s revenue reached RMB 891.4 billion in 2020, up 3.8% year on year, but down from an annual growth rate of 19.1% in 2019.
- The company saw revenue growth from its consumer business—which includes smartphones, tablets, and computers—fall off a cliff. Growth in this segment fell from 34% in 2019 to 3.3% last year.
- “The US restrictions have impacted our business, especially our mobile phone business, and that resulted in modest growth last year,” Ken Hu, Huawei’s rotating chairman, said during a press conference on Wednesday.
- Sales from the company’s enterprise business were a bright spot, increasing 23% year on year to reach RMB 100 billion. Revenue from its carrier business increased just 0.2% annually to RMB 300 billion, slowing from 3.8% in 2019.
- The company’s net profit hit RMB 64.6 billion, up 3.2% on the year but slower than the 5.8% in 2019.
- China accounted for much larger portion of the company’s overall sales. The country made up nearly two-thirds of its revenue last year. In 2019, sales from China accounted for just under 60% of its revenue.
This article has been corrected to reflect that Huawei’s consumer business revenue growth fell, not its revenue as previously stated.