Huawei’s smartphone business is struggling under US sanctions that limit the purchase of chips and other components from major suppliers.
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Beijing — China’s telecommunications giant Huawei announced on Thursday that its first-quarter revenues were down nearly 14% from a year ago, while profit margins were more than half.
“Our consumer business has been greatly affected. [information and communications technology] Huawei’s Rotation Chairman Ken Fu said in a statement that the infrastructure business is growing steadily.
The company reported first-quarter sales of 131 billion yuan ($ 20.63 billion). This is a decrease of 13.9% from the same period last year and more than 27% from the fourth quarter of 2021.
The profit margin of 4.3% in the first quarter was less than half of the 11.1% reported a year ago.
Hu said the quarterly results were in line with the company’s expectations and Huawei increased its investment in R & D.
Huawei’s smartphone business is struggling under US sanctions. The Trump administration has placed the company on a blacklist that restricts the purchase of critical components such as advanced semiconductors from US suppliers.
According to Counterpoint Research, sales of smartphones from various brands in China fell 14% in the first quarter from a year ago.
Huawei recorded the worst decline among the seven brands, ranked sixth in market share, and sales plummeted 64.2% year-on-year, the report shows. The company’s smartphone sales in China also fell 12% from the previous quarter.
Apple According to Counterpoint, China’s only other company on the list saw a 23% drop in quarterly sales. However, iPhone makers’ sales in China increased 4.4% in the first quarter from a year ago.
Huawei emphasizes recruitment and Development of other business lines To counter the impact of lower smartphone sales.
In particular, Huawei has entered the hot electric vehicle market by incorporating the HarmonyOS operating system and other technologies into vehicles manufactured by traditional Chinese car brands, although the company said it would not build its own cars.
Chairman Hu said earlier this week that at least two models using Huawei’s technology will be launched this year. The first car to use HarmonyOS Aito M5, which started delivery earlier this year.
Huawei said its R & D team at Smart Auto has reached 5,000 and its investment in automotive technology-related businesses reached $ 1 billion last year.