Huawei makes billion-dollar profit despite us sanctions

Huawei makes billion-dollar profit despite us sanctions

Shenzhen (dpa) – huawei closed the past year with a profit in the billions despite tough sanctions imposed by the u.S. The chinese technology group benefited from its strong position in its home market, while international smartphone sales, among other things, declined.

The company’s revenue from shenzhen, south china, rose 3.8 percent in 2020 to 891.4 billion yuan (about 115.8 billion euros). Profit rose 3.2 percent to 64.6 billion yuan (8.4 billion euros), huawei announced wednesday.

Last july, the u.S. Government further tightened its sanctions against huawei. The new measures are intended to cut off access to chips from international production for the chinese smartphone supplier and network supplier. Among other things, the USA accuses huawei of espionage, which the company rejects.

On the whole, the deal went quite well, said the chief secretary of the huawei board, jiang xisheng, to the german press agency. But "of course we have a lot of difficulties because of the US sanctions," said the top manager. In particular, the decline in sales of high-end smartphones was "relatively rough".

According to calculations by the market research firm IDC, huawei’s smartphone sales fell by more than one-fifth to 189 million units in 2020. Huawei, which once wanted to become the market leader, was thus in third place worldwide after samsung and apple. At the fourth quarter with the christmas business, the downward trend accelerated to a minus of more than 40 percent.

The crash on the world market was triggered by the fact that huawei can no longer sell smartphones with pre-installed google services because of the US sanctions. These include the play store app platform, through which android phone users in the west mostly download their applications.

Chip sanctions caused further problems. Huawei can only produce high-end smartphones because it has built up a stockpile of chips, said jiang xisheng. Experts such as ranjit atwal from the market research company gartner assume that huawei’s stock purchases were one of the triggers for the current chip shortage, which has caused production stoppages at car manufacturers, among others.

Producing the missing components itself is not an option, the huawei manager said. "The production of these chips is very complicated and impossible for us at the moment. We are not considering that". However, they are working on alternatives and solutions to diversify the supply chains so as not to be dependent on individual suppliers or countries. This could also include stronger cooperation with european partners.

Meanwhile, other business areas are helping to compensate for some of the setbacks. The business with wearables such as computer watches or other consumer devices such as headphones, laptops and smart screens is developing "very well".

Huawei is also working on products for connected cars and intelligent vehicles, for example. "We would also like to focus on this area in the future," said jiang xisheng. Expresses that huawei does not want to produce vehicles itself, but wants to work more closely with manufacturers as a supplier. The company is also interested in further cooperation with german carmakers.