Wednesday, 22 April 2020 09:03

Huawei revenue growth for 1Q2020 shows big fall from previous year Featured

Huawei revenue growth for 1Q2020 shows big fall from previous year Pixabay

Chinese telecommunications equipment vendor Huawei Technologies has seen a sharp drop in revenue growth for the first quarter of 2020, reporting a sum of 182.2 billion yuan (A$41.1 billion), an increase of just 1.4% year-on-year.

Last year, the company recorded 179.7 billion yuan in revenue during the first quarter, an increase of 39% on the corresponding period in 2018.

While Huawei provided plenty of detail about its 1Q2019 revenue, it did not provide any more details this year, adding only that the net profit margin for 1Q 2020 was 7.3%, not much different from the previous year, when it was about 8%.

"As COVID-19 continues to spread around the world, Huawei is taking proactive measures to ensure the safety of its employees," the results statement said.

"The company and its supplier network are working together to address the tough challenges facing production and resume operations. Huawei's business is continuing as usual and its overall business results in Q1 2020 are in line with expectations."

The obvious reason for this drop in revenue growth is the increasing sanctions that the US has placed on the company; from May last year onwards, Huawei has been unable to use Google's Android mobile operating system with its proprietary apps on its smartphones.

Thus, three models have been released with the open source version of Android, one which lacks Maps, YouTube, Drive and Gmail. This would have affected sales, though there are no figures to bear it out. Huawei smartphones have excellent cameras but with the Google apps, few outside China will buy the devices.

As a result, Huawei has been squeezed both by other brands like Samsung and Apple, and also Chinese companies like OPPO; the competition between Chinese companies is fierce.

Despite this, Huawei has grown its market share at home and this, in the main, has kept it going. On the international front, it has managed several wins in the 5G market, despite all the negative publicity put out by the US and some of its allies.

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.





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