Huawei Technologies has displayed remarkable resilience, registering consistent revenue growth during the initial three quarters of 2023. This commendable performance is attributed largely to the robust sales of its recently launched Mate 60 series 5G smartphones, which emerged as a beacon of success amidst the shadows of US sanctions.
From January to September, the tech titan based in Shenzhen reported revenues touching 456.6 billion yuan (approximately US$62.4 billion). This signifies a growth of 2.4% when juxtaposed against the revenues from the corresponding period the previous year. Nonetheless, the pace of this revenue growth did decelerate slightly from the 3.1% surge observed during the first half of 2023.
In terms of profitability, Huawei noted a net profit margin of 16% over these nine months. This uptick is partially attributed to the partial gains realized from strategic business sales and optimization of operational efficiencies. A slight progression can be observed here, given that the profit margin stood at 15% during the first half of the year. Remaining true to its ethos of transparency, Huawei, although privately-owned, has taken the initiative to periodically share crucial financial metrics with the public. While segment-specific details were not divulged, it was indicated that the consumer business segment, encompassing smartphones and the Aito-branded electric cars, witnessed positive revenue trajectories. Moreover, the enterprise-focused cloud division, fortified with the Pangu AI model, recorded substantial growth.
Ken Hu Houkun, Huawei’s rotating chairman, articulated the company’s future strategy, emphasizing bolstering investments in research and development. The objective is clear: to harness the diverse potential of its business offerings and elevate the competitive prowess of its products and services.
The last few months were especially crucial for Huawei as it reestablished its stronghold in the smartphone domain. The unexpected launch of the Mate 60 series smartphones in August, underpinned by the indigenously-developed 5G Kirin 9000s processor, was a remarkable feat, especially considering the prevailing US technology sanctions. The unveiling of the Mate 60 series not only marked the brand’s resurgence in the 5G smartphone arena but also incited a wave of nationalistic support, culminating in heightened domestic demand. Consequently, Huawei’s smartphone sales for the third quarter swelled by 37% year-on-year, even as the broader Chinese smartphone market contracted by 3%, as per data from Counterpoint Research.
Additionally, to diversify its revenue sources and mitigate the repercussions of sanctions, Huawei has aggressively ventured into the cloud computing domain. A testament to this strategy was the establishment of a data centre in Riyadh, Saudi Arabia’s capital, in September. Aimed at furnishing public cloud solutions for clientele spanning the Middle East, North Africa, and Central Asia.
Yet, challenges persist. Huawei’s telecommunications operations face mounting challenges in Western geographies, especially with the European Union advocating for its exclusion from 5G networks, citing national security concerns.
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