Huawei’s first quarter income tumbles by almost 14% as smartphone gross sales plunge

BEIJING — Chinese language telecommunications large Huawei introduced Thursday that first quarter income fell by almost 14% from a yr in the past, whereas its revenue margin greater than halved.

“Our client enterprise was closely impacted, and our [information and communications technology] infrastructure enterprise skilled regular development,” Ken Hu, Huawei’s rotating chairman, mentioned in an announcement. “In 2022, we nonetheless face a difficult and complex enterprise setting.”

The corporate reported 131 billion yuan ($20.63 billion) in income for the primary quarter. That is down by 13.9% from the identical interval final yr, and a greater than 27% decline from the fourth quarter of 2021.

First quarter revenue margin of 4.3% was lower than half the 11.1% reported a yr earlier.

Hu mentioned the quarterly outcomes have been according to the corporate’s expectations and that Huawei has elevated its funding in analysis and growth.

Huawei’s smartphone enterprise has struggled beneath U.S. sanctions. The Trump administration put the corporate on a blacklist that restricts it from shopping for crucial elements akin to superior semiconductors from U.S. suppliers.

Smartphone gross sales in China throughout totally different manufacturers fell by 14% within the first quarter from a yr in the past, in line with Counterpoint Analysis.

Huawei logged the worst decline out of seven manufacturers, rating sixth by market share and with gross sales plunging by 64.2% from a yr earlier, the report confirmed. The corporate’s smartphone gross sales in China additionally fell by 12% from the prior quarter.

Apple was the one different firm on the checklist to put up a quarter-on-quarter gross sales decline in China, down by 23%, in line with Counterpoint. Nonetheless, the iPhone maker’s China gross sales nonetheless grew by 4.4% within the first quarter from a yr in the past.

Huawei has emphasised hiring expertise and creating different enterprise traces to counter the impression of falling smartphone gross sales.

Particularly, whereas the corporate mentioned it is not going to construct its personal automobiles, Huawei has entered the new electrical automobile market by incorporating its HarmonyOS working system and different expertise into automobiles manufactured by conventional Chinese language auto manufacturers.

Rotating chairman Hu mentioned earlier this week that at the very least two extra automobile fashions utilizing Huawei expertise could be launched this yr. The primary automobile to make use of HarmonyOS was the Aito M5, which started deliveries earlier this yr.

Huawei mentioned its analysis and growth workforce for good autos has reached 5,000 folks, and that the corporate’s funding in auto tech-related operations reached $1 billion final yr.