Huawei’s smartphone business has struggled with US sanctions that restrict it from buying chips and other components from key suppliers.
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BEIJING – Chinese telecommunications giant Huawei on Thursday announced first-quarter revenue fell nearly 14% from a year ago, while profit margins more than halved.
“Our consumer business was hit hard and [information and communications technology] Ken Hu, Huawei’s Rotating Chairman, said in a statement, “In 2022, we still face a challenging and complex business environment.”
The company reported revenue of 131 billion yuan ($20.63 billion) in the first quarter. This is down 13.9% year-on-year and down more than 27% compared to the fourth quarter of 2021.
The first-quarter profit margin was 4.3%, less than half of the 11.1% reported a year earlier.
Hu said the quarterly results were in line with the company’s expectations, and that Huawei has increased investment in research and development.
Huawei’s smartphone business has struggled under US sanctions. The Trump administration has placed the company on a blacklist that restricts it from purchasing key components such as advanced semiconductors from US suppliers.
According to Counterpoint Research, smartphone sales in China among different brands fell 14% in the first quarter from a year ago.
The report found that Huawei recorded the worst drop among the seven brands, ranking sixth in market share and with sales slumping 64.2% from a year earlier. The company’s smartphone sales in China also fell 12% quarter-on-quarter.
Apple was the only company on the list to report a drop in quarterly revenue in China, down 23%, according to Counterpoint. Still, the iPhone maker’s China sales were still up 4.4% in the first quarter from a year ago.
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Huawei has emphasized recruiting talent and develop other business lines to counter the impact of falling smartphone sales.
Specifically, while the company has said it will not make its own cars, Huawei has entered the hot electric car market by incorporating HarmonyOS and other technology into cars made by auto brands. Traditional Chinese production.
Rotating Chairman Hu said earlier this week that at least two more car models using Huawei’s technology will hit the market this year. The first car to use HarmonyOS was Aito M5, which started shipping earlier this year.
Huawei says its intelligent automotive research and development team has numbered 5,000 people, and the company’s investment in automotive technology-related activities reached $1 billion last year.
