Despite the bans from several countries, Huawei sustains its gain by achieving net profit of 64.6 billion yuan in 2020. But its growth in markets outside of China has been declining.
In terms of numbers, sales in China have increased by 15.4% to 585 billion yuan. While in Europe, Middle East and Africa (EMEA), Asia Pacific and Americas, sales dropped from 8.7% to nearly 25%. Overall, Huawei sustains its gain in 2020 says Campbell Kwan of Zdnet.
The inability of its smart devices to access the Android ecosystem was the main reason for the decline in sales. As stated in its annual report.
Huawei faced accusation for violating US national security
Two years ago, the US Department of Commerce listed Huawei to its Entity list. Huawei is believed to be engaging in activities that violate the national security or foreign policy. This incident has resulted in the company’s losing support for Android.
Whenever a company is listed as a legal entity, the US company is not allowed to transfer technology outside the US. Unless it obtains an approving license from the US government.
Huawei’s profit dropped after more than five years
For the first time in over five years, Huawei’s profit dropped to 72.5 billion yuan in 2020. Huawei achieved revenues of more than 73 billion yuan in 2018 and nearly 78 billion yuan after a year. However, due to the lower operating costs, annual net income continued to grow slightly.
Amidst the company trying to circumvent its US sanctions together with other bans from Australia, Sweden and the UK. Huawei was thankful to its loyal consumers and carrier businesses that gave business stability in the Chinese market.
In its 2020 annual report, Huawei showed that the company made about 483 billion yuan from its consumer segment. And about 302.6-billion-yuan annual revenues from the carrier businesses, which were flat compared to the previous year.
The company furthermore said that it is working very hard to come up with new innovative products. Which has resulted in its increased revenues by about 23% year-on-year to just over 100 billion yuan.
Huawei sustains its gain: Honor was sold
Hu Houkun, the current chairman of Huawei, apologizes for the delay of Honor’s turnover. The delay was due to the COVID-19 pandemic but he promises that the company will complete not beyond June 30. Because of the trade war between US and China, Huawei reportedly was forced to sell its stake in Honor. Huawei sold Honor to 30 dealers and agents for $40M which resulted in forming the Shenzhen Zhixin New Information Technology.
The outlook of the company for this year 2021 was also delivered by Hu in its annual report. Saying that the company expects uncertainty to continue and volatility remains in the global environment. Although, vaccination programs are ongoing across the world, yet we see resurgence of COVID-19 in some areas. This has made uncertainty to continue moving forward. On top of that, the geopolitical instability poses more challenges for the worldwide community, Hu added.