Shanghai: According to data released on Friday, Chinese telecom giant Huawei’s revenue plummeted by 38% in the second quarter, smartphone sales were subject to US sanctions and its cheap brand Honor was removed from the shelves.
After the administration of former President Donald Trump expressed concern that the company might be used for espionage, Huawei is at the center of fierce US-China trade and technology competition.
The United States did not provide any evidence of espionage, but it prohibits Huawei from acquiring technologies vital to its operations, such as microchips, and prohibits it from using Google’s Android operating system.
The Shenzhen-based company said that in the first half of this year, Huawei’s total revenue was RMB 320.4 billion (US$49.6 billion), a year-on-year decrease of 29%.
Its net profit margin was 9.8%, a slight increase from the same period last year.
Huawei’s consumer products division, including smartphones, had sales of 135.7 billion yuan in the first half of the year, a 47% year-on-year decrease.
A company spokesperson said that part of the decline was due to the loss of honor. Huawei sold the honor at the end of last year to help it maintain access to components and survive.
Huawei’s hardships forced it to quickly turn to new business lines, including enterprise computing, smart car technology and software.
In the accompanying statement, the rotating chairman Xu Zhijun stated that “our goal is to survive.”
“These have been challenging times, and all of our employees have been pushing forward with extraordinary determination and strength,” he said.
Huawei is the world’s biggest supplier of telecoms network gear and was once a top-three smartphone producer along with Apple and Samsung.
But it has fallen well down the smartphone ranks amid the US pressure, according to industry trackers.
Its networking gear has also been removed or delayed in a succession of Western countries on national security concerns.
The revenue of this business segment in the first half of 2021 was 136.9 billion, a year-on-year decrease of 14.2%.
A company spokesperson said that Huawei has no plans to lay off employees or sell off.
Another headache for the company is that Chief Financial Officer Meng Wanzhou-the daughter of CEO and founder Ren Zhengfei-is currently battling the United States in Canada.
Meng was accused of defrauding HSBC and misrepresenting its connection with a subsidiary that sold telecommunications equipment to Iran, putting the banking giant at risk of violating US sanctions against Tehran.
Just a few days after Meng’s arrest, China imprisoned two Canadians on charges of espionage. Ottawa believed that this was revenge for Meng’s arrest.
Both Canadians have been tried, but their verdict is still unknown.
The US campaign against Huawei was initiated under Trump’s leadership, but Joe Biden’s current administration said it will not let up.