Despite US pressure, Huawei resists thanks to Chinese market

Despite Us Pressure, Huawei Resists Thanks To Chinese Market

The Chinese group published on Wednesday a turnover of 111 billion euros, up 3.8%.

While all businesses on the planet must organize to respond to the pandemic, Huawei must also face US sanctions. For two years, the United States has increased restrictions on the Chinese group, suspected of spying on behalf of Beijing. Ken Hu, the president of Huawei, has repeatedly denounced “unfounded measures”. “We stood firm in the face of adversity», Hammered the president in office. Since 2011, three men have taken turns in this pivotal position.

in fact is doing well. Last year, the group posted a turnover of 111.1 billion euros, up 3.8%, for a profit of 8.1 billion, up by 3.2%. Apparently, all the indicators are green, for a group which also spent 17.7 billion euros on research and development in the last fiscal year and nearly 90 billion in ten years.

Smartphone sales struggling

In detail, the group’s results are impacted by the measures taken by Washington. Huawei no longer communicates on the number of smartphones sold worldwide, after its sales decline in many Western countries, but also in China. In the end, Huawei’s smartphone sales plunged 24% last year, according to Gartner. This decrease is also explained by the fact that the Chinese brand no longer has access to all of Google’s services: Huawei can use the open source version of Android for its smartphones, but no longer the group’s application store. .

Huawei has set up a response, developing both its own operating system and its Huawei Mobile Services (HMS) app store. With 120,000 applications to date, the group is still far from those of Apple and Google. According to Huawei, “many Chinese brands are ready to adapt our OS and HMS to escape the duopoly in place and to protect themselves from possible US sanctions“. The Chinese market alone offers sufficient outlets to promote the emergence of a third player in the market. Even if until now, no actor has managed to add a third ecosystem to the two pre-existing ones.

As a result of the decline in sales of Huawei’s smartphones and the sale of the Honor brand, the consumer division only represents 54% of the group’s revenues, against 60% the previous year. Sales of other devices helped offset the decline in mobile telephony. Huawei has made a remarkable entry into the PC market and markets many connected objects, starting with watches, tablets and speakers.

Massive conversion to 5G

The group is also showing very good performance in its network equipment division. But the stability of its turnover is essentially based on the dynamism of the Chinese market, which has massively converted to 5G. A third activity is booming: the business division grew by 23%, reaching 11% of the group’s overall revenues. This marks Huawei’s development in the field of business services, such as the Cloud. The group intends to focus its efforts on this promising activity while the digitization of companies continues.

Huawei notes that the pandemic has accelerated the digitalization of businesses, and that the more countries are advanced on this path, the better they are resisting the current crisis.