Q1 Phone sales down >30%

“2021 will be another challenging year for us, but it’s also the year that our future development strategy will begin to take shape,” said Eric Xu, Huawei’s Rotating Chairman. Huawei generated CNY152.2 billion in revenue, a 16.5% decrease year-on-year. The Network Business continued to grow. It wasn’t officially announced, but consumer products other than phones probably increased sales. The fitness tracker, earbuds, and watches are winning strong reviews.

Phones have been about half of Huawei sales. I infer the 16.5% overall sales fall resulted from a 30-40% fall in phone sales. Other lines of business will soon replace phones, including cars and cloud.

Huawei will survive and has a clear plan to thrive after a hard year or two. It has $40 billion in the bank and if needed essentially unlimited support from the government. It would be smart for the US to end the war but unlikely. Powerful Democratic Senators Schumer and Warner have joined with Republicans. Bideon is unlikely to take this on until after the November 2022 elections.

Ren has called on the spirit of Shangganling and Huawei’s people are responding.

Huawei Announces 2021 Q1 Business Results, Business Remains Resilient

Apr 28, 2021

[Shenzhen, China, April 28, 2021] Huawei announced its business results for the first quarter of 2021 today, which were in line with forecast.

In Q1, Huawei generated CNY152.2 billion in revenue, a 16.5% decrease year-on-year. Its network business maintained steady growth, while consumer business revenue declined, in part as a result of selling the Honor smart device brand in November 2020. Huawei’s net profit margin was up 3.8 percentage points[1] year-on-year at 11.1% – the result of the company’s ongoing efforts to improve quality of operations and management efficiency, as well as a patent royalty income of US$600 million.

“2021 will be another challenging year for us, but it’s also the year that our future development strategy will begin to take shape,” said Eric Xu, Huawei’s Rotating Chairman. “We thank our customers and partners for their ongoing trust. No matter what challenges come our way, we will continue to maintain our business resilience. Not just to survive, but do so sustainably. As always, we will remain focused on the needs of our customers and keep delivering practical business value.”

Huawei is driving efforts to fully unleash the value of 5G. It is helping carriers around the world roll out their 5G networks, meeting the demands of consumers and industries alike, while boosting its own delivery efficiency. It continues to improve its software engineering capabilities and ramp up investment in the software sector to gradually increase the proportion of software and services in its total revenue mix.

“As always, we remain committed to technological innovation and investing heavily in R&D as we work to address supply continuity challenges caused by restrictions in the market”, stressed Xu. “We will continue making breakthroughs in basic science and pushing the frontiers of technology.”

[1] The financial data disclosed here are unaudited figures compiled in compliance with the International Financial Reporting Standards; exchange rate at the end of March 2021: US$1 = CNY6.5670 (source: external agencies)

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