- During the three months to March 31, the company’s revenue dropped 16.5% year-on-year to 152.2 billion Chinese yuan (~$23.5 billion).
- The decline is due to the poor performance of its consumer business unit.
- Eric Xu, one of Huawei's rotating chairman, predicts a "challenging year" ahead.
- The company is betting big on software and services to help offset its declining consumer business revenues
The US sanctions continue to bite Chinese tech giant Huawei, two years since they went into effect. During the three months to March 31, the company’s revenue dropped 16.5% year-on-year to 152.2 billion Chinese yuan (~$23.5 billion). It’s the second quarter the company’s revenue has declined.
The overall revenue decline was largely due to the poor performance of its consumer business. Revenue from its consumer business declined, which the company attributed to the sale of its Honor smart device brand in November.
Huawei’s consumer business, including smartphones, laptops, and other devices, has been majorly hit by the ongoing US sanctions.
“2021 will be another challenging year for us, but it’s also the year that our future development strategy will begin to take shape,” said Eric Xu, one of Huawei’s rotating chairman, in a statement.
Huawei’s network business has been critical for the company’s survival after the consumer business fallout. Its network business “maintained steady growth,” according to the company.
But despite the drop in revenue, Huawei actually increased its net profit margin by 3.8 % to 11.1% year-on-year.
The tech giant is betting on software moving forward to increase the revenue from the software and services unit into its general balance sheet.
For the whole of 2020, Huawei’s business showcased resilience, with a jump in sales revenue and net profit.