Huawei recognizes the impact of US sanctions, especially on the sale of mobile phones


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The Chinese telecommunications giant Huawei has recognized through the mouth of its rotating president Ken Hu that the sanctions imposed by the United States, still in force despite the entry of the new Democratic administration in January, have had consequences for the activity of the Chinese company. Specifically, Hu has stated during the traditional press conference to present the ‘Annual Results Report’ that “the US sanctions have had a great direct impact on us, especially in the revenues of devices for end consumers.” Specifically, the Chinese company has pointed out that “in the last two years the impact has been reflected in the supply and value chain ».

According to the consulting firm Canalys, cited by AFP, Huawei would have seen its global smartphone sales drop by 22% in 2020. This year the Chinese firm has not offered data on the number of phones sold worldwide, although its chief executive officer has assured that in the 68% growth in the billing of smart mobile devices It makes up for the losses in this chapter from the confrontation with Washington. “The Huawei brand in smartphones is going to maintain its leadership in the consumer segment: we still have many other products to promote in the market,” he assured.

In any case, Hu stressed that the company has undertaken «Very proactive actions to stabilize supplies, diversify our supply chain and ensure business continuity and investment in innovation ”. The rotating president of the company has pointed out that, despite the difficult economic environment derived from the pandemic, “we have stood firm in the face of adversity.”

In this sense, they have mentioned the commitment to diversification through tablets or other devices. Which has admitted that it has offset “in part” the impact on the sale of smartphones and acknowledged that “The Chinese market has contributed to the success of the company in 2020”. To the difficulties with smartphones, he has admitted problems with the chips that “in the last two years he has had to buy to generate a large reserve, with which to serve customers, especially corporate ones.” In this sense, he stated that “Semiconductors are a fundamental part of the production chain and the situation will have to be reassessed.”

Record net profit

Despite the pandemic and US sanctions still in place, Huawei has reported that in 2020 it posted a record net profit of about 8.390 million euros (64.6 billion yuan). Which represents a rise in 3.2% year-on-year. Regarding billing, the technology giant has increased its revenue by 3.8% to 115.9 billion euros, although this pales compared to 19.1% in 2019. By markets, the US bolt may increase Huawei’s dependence on its domestic market. Specifically, China accounted for 65.6% of its income last year and it is there where the technology giant billed 15.6% more.

Hu has also wanted to defend the financial giant’s good health despite the pandemic and US sanctions. Specifically, you mentioned that the ratio between assets and liabilities has been reduced “to a minimum of 10 years” standing at 62.3%.

In parallel, the limitation of access to Android updates – Google – widely used in terminals outside of China has pushed Huawei to develop its own operating system ‘HarmonyOS‘. And implement its ‘Seamless AI Life (1 + 8 + N)’ strategy that seeks to offer the user an intelligent experience in areas as different as home, travel, leisure or the office, through the use of different devices. In this way, the Chinese giant has recognized that they are “Investing a lot in developers, establishing a practical ecosystem and we are going to need a lot of compatible software and hardware.” According to their calculations, they already have 2.3 million registered, of which 300,000 are international, according to their own estimates.

Forecasts 2021

Regarding his forecasts for 2021, Hu stressed that «it will be a year of opportunities and challenges: On the one hand, we attach great importance to the opportunities of digital transformation and we are aware of the obstacles that will be presented to us ”, referring to the health crisis and what he has called“ geopolitical conflicts ”. In this sense, he has opted for “keeping calm, doing our job well and maintaining a firm position,” a long-term strategy as an innovative company that we can add value to society ”.

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