The Chinese tech firm Huawei announced on Friday (August 11, 2023) that its consumer business revenue increased by 2.2% over the prior year.
The moderate growth coincides with China’s slower-than-anticipated economic recovery this year and sanctions imposed by the United States on the corporation starting in 2019. Those business restrictions have since weighed on results.
At 103.5 billion yuan ($14.27 billion) in first six months of 2023, Huawei’s consumer revenue was less than half what the segment had generated during the same period in 2019 and 2020.
The 2.2% pace of growth was also slower than the company’s overall revenue increase of 3.1% to 310.9 billion yuan in the first half of the year.
Huawei’s ICT infrastructure business, which includes carrier and enterprise services revenue, contributed the most to overall revenue with 167.2 billion yuan for the first half of the year.
In the first half of 2023, cloud services generated 24.1 billion yuan in income, while intelligent automotive solutions, whose products include technology for new energy cars, generated 1 billion yuan.
Huawei has its own electric car brand, Aito, which claims to have produced 100,000 vehicles in 15 months through a partnership. Those sales are generally counted as part of the consumer business.
The consumer segment is the only unit with year-on-year comparable figures since Huawei didn’t start reporting revenue breakdown by cloud and other industries until late last year.
Huawei reported a significant increase in its net profit margin of 15% in the first half of the year, up from 5% in the year-ago period. Better management practices and profits from the sale of particular firms, which the company did not name, were credited by the corporation as causes of the improvement.
Nevertheless, we are continuously building out our mechanisms for global business continuity management and our agile operations management system. We are confident that we can meet our annual business targets and continue creating value for customers and society at large.
The spokesperson
The business advanced its efforts to monetize AI by introducing an AI model in July for enhancing efficiency and safety in mining operations.
Second-quarter overall revenue grew by 4.8% year-on-year to 178.8 billion yuan the fastest pace since only the fourth quarter of 2022, according to CNBC calculations.
Looking for smartphone growth
Overall revenue growth in the first half of 2023 comes off a low base. Huawei previously said its revenue barely grew in 2022 after reporting in 2021 its first annual revenue decline on record.
In 2019, the U.S. under President Donald Trump put Huawei on a blacklist that restricts the ability of American companies to sell to the Chinese telecommunications giant. That includes licensed access to the latest versions of Google’s Android operating system.
Huawei has instead released its own system, called Harmony OS. Earlier this month, the company announced the latest version of that operating system and claims it was downloaded over one million times in three days.
This year, Huawei expects the launch of its flagship consumer products to return to a “normal” schedule, amid a slump in the smartphone market. The company did not share the extent to which there had been delays. In 2019, CNBC reported Huawei pushed back the release of a foldable phone.
In March, Huawei released its P60 smartphone, Mate X3 foldable and Watch Ultimate wearable, whose sales contributed to first-half growth in consumer business revenue, the company said.
“The industry and global markets will remain rife with uncertainty for the rest of 2023,” a Huawei spokesperson said in a statement.
“Nevertheless, we are continuously building out our mechanisms for global business continuity management and our agile operations management system,” the spokesperson said.
“We are confident that we can meet our annual business targets and continue creating value for customers and society at large.”
