Chinese demand helps Huawei increase revenues

(Image credit: Future)

Domestic demand for its services helped Huawei post annual increases in profit and revenues during 2020 despite the ongoing impact of US sanctions that have severely restricted parts of its business.

The company has been on the US ‘non-entity’ list since 2019, a status that severely impacts its ability to source technologies from American companies, while Washington has also put pressure on its allies to ban the firm from participating in their 5G rollouts due to national security concerns.

The measures have ended any ambition of becoming the world’s leading smartphone manufacturer, while its carrier business has suffered from being excluded from several key markets – including the UK.

Huawei licences

Huawei has worked to design and manufacture of as many components itself as possible and stockpile those it can’t. it has also created its own operating system and launched its own app store in a bid to compensate for the loss of Google’s Android operating system and marketplace.

This has helped its devices remain competitive in China, but the absence of key services is more keenly felt in the West.

While revenues were up 15.4% to 584.9 billion Yuan (£64.7bn) in its homeland, they fell in every other region. Total sales increased by 3.8% to 891.4 billion Yuan (£98.65bn), while net profit was up 3.2% to 64.6 billion Yuan (£7.15bn).

Huawei admitted that growth had slowed as a result of its numerous challenges, but stressed performance was in line with its forecasts.

Despite the impact of US sanctions, Huawei did manage to increase consumer revenues by 3.3%, although this category also includes sales of other products such as laptops and smartwatches and the company does not break this down any further.

There was also a small increase at the firm’s carrier business of 0.2%, while enterprise income rose by 23%. Huawei has benefited from aggressive early rollouts of 5G in China, while it is also working on industry-specific connectivity services for areas like logistics and utilities.

“Over the past year we've held strong in the face of adversity," said Ken Hu, Huawei's Rotating Chairman. "We've kept innovating to create value for our customers, to help fight the pandemic, and to support both economic recovery and social progress around the world. We also took this opportunity to further enhance our operations, leading to a performance that was largely in line with forecast.

“We will continue to work closely with our customers and partners to support social progress, economic growth, and sustainable development.”

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.