Huawei is feeling the effects of US sanctions, records first quarterly revenue decline

midian182

Posts: 6,681   +59
Staff member
Why it matters: Over a year after Donald Trump added the company to an export blacklist, Huawei is feeling the bite of sanctions after its quarterly revenue shrank for the first time. Sales and profit were up for all of 2020, albeit only slightly, but the fourth-quarter decline could continue throughout 2021.

It was back in May 2019 when Trump added Huawei and 70 affiliates to the Bureau of Industry and Security (BIS) Entity List, ensuring US companies could no longer do business with these firms without a license. It led to Google’s apps and services no longer appearing on the Chinese giant’s new products, making them less appealing to western consumers.

Thanks to its popularity in China and other markets, the sanctions against Huawei weren't felt straight away. But the company just had its most difficult year to date and saw its quarterly revenue fall YoY for the first time on record. Q4 2020 was down 11% to 220.1 billion yuan ($33.5 billion), while the previous quarter experienced 3.7% growth and Q2 was up 23%, writes Bloomberg.

Full-year sales and profit were actually up marginally, 3.8% and 3.2%, respectively. The company puts this down to record 5G base station orders and solid mobile sales in the first half of 2020, offsetting the final six months.

“The supply restrictions for our smartphone business has caused us a great impact, and we haven’t been able to see a clear picture in the supply for our smartphones,” said Ken Hu, one of Huawei’s three deputy chairmen. “We think this is a very unfair situation to Huawei, and it has caused a lot of damage to us.”

President Biden’s administration isn’t easing the pressure on Huawei. It’s led the company to other revenue sources, including creating tech for healthcare, coal mining, and even pig farming. There are rumors it is also eying the self-driving vehicle industry.

Earlier this month, Huawei, which owns the world’s most extensive portfolio of 5G patents (3,007), said it would start charging companies such as Apple and Samsung for using them in their mobile products.

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QuantumPhysics

Posts: 4,752   +5,192
Hua Wei will be fine.

Meanwhile, Americans are about to see record Stagflation.

#1. Extended period of unemployment
#2. Extended period of underemployment
#3. Recession caused by fear of spending money and job loss.
#4. Inflation caused by higher cost of living and cost of goods due to underproduction.
#5 Poorly targeted stimulus (welfare)

America, the IMF and the FR will gradually lose their grip.

None of this needed to happen, and now Americans are going to feel the pain.
 

Eldritch

Posts: 296   +454
Hua Wei will be fine.

Meanwhile, Americans are about to see record Stagflation.

#1. Extended period of unemployment
#2. Extended period of underemployment
#3. Recession caused by fear of spending money and job loss.
#4. Inflation caused by higher cost of living and cost of goods due to underproduction.
#5 Poorly targeted stimulus (welfare)

America, the IMF and the FR will gradually lose their grip.

None of this needed to happen, and now Americans are going to feel the pain.

Other companies all positive growth.

Huawei YoY change : -42%

It seems we have different definitions of 'fine'.
 

S Hone

Posts: 56   +57
Hua Wei will be fine.

Meanwhile, Americans are about to see record Stagflation.

#1. Extended period of unemployment
#2. Extended period of underemployment
#3. Recession caused by fear of spending money and job loss.
#4. Inflation caused by higher cost of living and cost of goods due to underproduction.
#5 Poorly targeted stimulus (welfare)

America, the IMF and the FR will gradually lose their grip.

None of this needed to happen, and now Americans are going to feel the pain.

Ignorant comment, there will be a massive boom once vaccinations are more widly administered and a coalition of countries willing to take on the evil lying authoratarians
 

Hexic

Posts: 938   +1,296
TechSpot Elite
Hua Wei will be fine.

Meanwhile, Americans are about to see record Stagflation.

#1. Extended period of unemployment
#2. Extended period of underemployment
#3. Recession caused by fear of spending money and job loss.
#4. Inflation caused by higher cost of living and cost of goods due to underproduction.
#5 Poorly targeted stimulus (welfare)

America, the IMF and the FR will gradually lose their grip.

None of this needed to happen, and now Americans are going to feel the pain.

I think this concept would make a great novel in the fiction category... Not so much in the geopolitical financial reality that exists.
 

Watzupken

Posts: 131   +103
Actually I agree that Huawei will be fine because the government will not let it go down. The more US try to gimp them, the more the government will support it just as a show that the company will not go down because of the sanctions. The concept of "face" is very strong. I see they are doubling down on laptops and computer components since their smartphone business is crippled.
 

GeforcerFX

Posts: 1,007   +473
" Earlier this month, Huawei, which owns the world’s most extensive portfolio of 5G patents (3,007), said it would start charging companies such as Apple and Samsung for using them in their mobile products" And why should those companies follow those patents, if I was either of them I would just continue to use the technology and ignore Huawei or any Chinese company that complains or tries to sue for patent infringement, Karma is a 300lb B!tch.