Chinese tech giant Huawei has reported a 2.2% year-on-year increase in its consumer business revenue for the first half of this year. This growth, while positive, comes in the midst of China’s slower-than-anticipated economic recovery and ongoing U.S. sanctions that have cast a shadow on the company’s performance since 2019.
Huawei Consumer Business Sees Modest 2.2% Growth
In the initial six months of 2023, it’s consumer revenue reached 103.5 billion yuan ($14.27 billion), a figure that falls short of the segment’s earnings during the same period in both 2019 and 2020, where it was more than twice as high. The pace of this growth is also more sluggish compared to the company’s overall revenue increase of 3.1%, which amounted to 310.9 billion yuan in the first half of the year.
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Significantly contributing to the overall revenue, it’s ICT infrastructure business, encompassing carrier and enterprise services, amassed 167.2 billion yuan in the first six months. The consumer business accounts for it’s electric car brand, Aito, which boasts 100,000 vehicle sales within 15 months through a partnership, an aspect that bolsters the company’s performance in this segment.
It’s worth noting that the consumer segment stands out for having year-on-year comparable figures due to Huawei’s recent practice of reporting revenue breakdowns for cloud and other industries.
Huawei’s net profit margin also showcased a noteworthy improvement, surging to 15% in the first half of this year from a mere 5% in the corresponding period of the previous year. The company attributes this enhancement to refined management systems and gains from undisclosed business sales.
In its continuous pursuit of monetizing artificial intelligence, Huawei launched an AI model in July aimed at enhancing safety and efficiency in mining operations. In the second quarter, the company experienced 4.8% year-on-year growth in overall revenue, amounting to 178.8 billion yuan—the swiftest expansion rate since the fourth quarter of 2022, according to CNBC’s calculations.
However, this year’s revenue growth stems from a relatively lower base. Huawei previously reported meager revenue growth in 2022, following its initial revenue decline in 2021—a first in its history.
The effects of U.S. sanctions put in place by the Trump administration in 2019 have impacted it’s journey by limiting American businesses’ ability to work with the Chinese telecommunications giant. Consequently, Huawei developed its own Harmony OS as an alternative to Google’s Android operating system. The latest version of Harmony OS garnered over a million downloads within just three days.
Despite challenges, Huawei anticipates the return of a “normal” launch schedule for its flagship consumer products this year, even amid a challenging smartphone market. The extent of potential delays was not disclosed. Notably, in 2019, CNBC reported Huawei’s delay in the release of a foldable phone.
A spokesperson from Huawei acknowledged the persisting uncertainty in the industry and global markets throughout 2023. However, the company remains resolute, stating its confidence in meeting annual business targets and continuing to generate value for customers and society at large. Huawei emphasizes its commitment to global business continuity management and agile operations management systems as keys to weathering the prevailing challenges.