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Huawei Revenue Drops Due to Poor Performance of Consumer Business Unit

Huawei's revenue dropped 16.5% year-on-year to 152.2 billion Chinese yuan (~$23.5 billion) in Q1, 2021

Story Highlights
  • 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.

Its smartphone business has been declining globally, and even in China.

“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.

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Alvin Wanjala

Alvin Wanjala has been writing about technology for over 2 years. He writes about different topics in the consumer tech space. He loves streaming music, programming, and gaming during downtimes.

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