Huawei Sales Fell By 32% After U.S. Sanctions and Honor Smartphone Brand Sale

(BEIJING) — Chinese tech giant Huawei’s sales fell 32% from a year earlier in the first nine months of 2021 under U.S. sanctions and following the sale of its Honor smartphone brand, according to figures released Friday.

Huawei Technologies Ltd.’s smartphone and other consumer-oriented businesses have been “significantly impacted” but sales to phone carriers and other commercial customers “remain stable,” its chairman, Guo Ping, said in a statement.

The company reported that revenue for September’s nine-month period was 455.8 trillion yuan ($71.3 million), and the profit margin at 10.2%. The revenue was lower than the 671.3 billion Yuan reported in 2020.
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Huawei, the world’s largest manufacturer of network gear is having trouble retaining market share because it has been denied access to many U.S. technology processor chips.

American officials say Huawei, China’s first global tech brand, is a security risk and might facilitate Chinese spying, which the company denies. Washington has been lobbying European allies and the United States to expel Huawei from upgrading their phone networks to next generation technology.

Huawei has responded by shifting emphasis to its home China market and to network technology for hospitals, factories and other industrial customers and other products that it says won’t be affected by U.S. sanctions. HarmonyOS is the company’s own smartphone operating system and it says that 150 million people will be using HarmonyOS by year end.

It did not provide any breakdowns of sales by type of business or region.

Huawei’s headquarters is in Shenzhen. The company claims it is controlled by its Chinese workers, who account for half of the 197,000 people employed in 170 countries.

Earlier, Huawei reported 2020 sales rose 3.8% in 2020 over a year earlier to 891.4 billion yuan ($135.8 billion), but that growth was down from 2019’s 19.1% growth.

Huawei’s latest results were depressed by comparison with the period before Honor was sold to a state-led investor group in November 2020 to revive the brand by separating it from the sanctions on the parent company. Honor was granted permission by the U.S. to purchase chips from Qualcomm Inc.

According to Canalys, Honor sold 14.2 million smartphones in the third quarter ending September. This is more than twice the number in the preceding quarter. The number one spot was taken by Honor. The number 3 spot in China’s populous Chinese market was behind Oppo, Vivo, as well as ahead of Xiaomi and Apple.

“HONOR is now sending clear signals that the brand has returned after its split from Huawei,” Toby Zhu of Canalys said in a report.


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