Chinese telecoms giant Huawei Technologies Co., reported a slight revenue decline this year for the first nine months of 2022, as reported by South China Morning Post. However, the company didn't reveal its bottom line, which is a first in almost 20 years.
(Photo : by HECTOR RETAMAL/AFP via Getty Images)
People walk next to a Huawei shop along a pedestrian street surrounded by shops and shopping malls in Shanghai, on October 12, 2022.
A Drop in Revenue
The company declared that its revenue from January to September dropped two percent from the same period last year to 445.8 billion yuan, which is equivalent to $61.8 billion.
In a statement, Eric Xu, the current rotating chairman of Huawei, said, "The decline in our device business continued to slow down, and our ICT infrastructure business maintained steady growth."
He also said that they would continue to bring in excellent talent and invest in R&D that will take the competitiveness of their products to the next level.
These recent financial struggles come as the company struggles to diversify their revenue streams after US sanctions compromised their access to advanced chips.
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In the Middle of a US-Chine Trade War
Since 2019, Huawei has found itself in the middle of the trade war between these two countries, which eventually turned into a full-blown tech war. In fact, in 2019, Huawei was put on the US Entity List due to national concerns, which kept the company from doing business with US companies without a license.
The challenges didn't stop there because the US Federal Communications Commission is set to ban approvals of new equipment in US telecom networks from Huawei and the ZTE Corp formally. Hence, this will tighten the restrictions on Huawei.
It's worth noting that in 2020, Huawei overtook Apple and Samsung Electronics in global smartphone sales for a short period. However, in 2021, the company plummeted with an 82% decline in shipments. Despite this, Huawei tried to stay relevant with the release of its new flagship Mate 50-series handsets last month.
Possible Reasons for the Decline in Revenue
Despite the challenges Huawei faced in the past few months, there are factors that could have contributed to the decline in revenue. First and foremost, the company was locked out of the US market, which is one of its key markets. The company also experienced a decline in its telecom infrastructure business. This is because they are unable to participate in some markets due to the US ban. Finally, Huawei's smartphone business is one of its main revenue streams, and this business has dropped significantly in the last year.
Despite Huawei's troubles in the US, the company is still on the move to expand its business. The company is looking forward to expanding its business in Africa and other markets. Huawei also has a strong equipment and components provider presence in key markets. Therefore, it's only a matter of time before the company will be able to recover from its recent setbacks.
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This article is owned by Tech Times
Written by April Fowell
