Growth returns to Huawei’s consumer business as smartphone sales rise again despite US sanctions

Huawei Technologies’ consumer business returned to growth after substantial decline in its smartphone sales in the past two years, as the Chinese telecoms equipment giant defies the impact of US sanctions to revive its once-lucrative handset segment.

The company said its total revenue grew 3.1 per cent in the first half of 2023, reaching 310.9 billion yuan (US$43.1 billion) and higher than the 0.8 per cent revenue growth seen in the first quarter and the 0.9 per cent growth for the full year of 2022.

Sales from the consumer business group, which includes smartphones and electric cars under the Aito brand, rose 2.2 per cent to 103.5 billion yuan, the company reported on Friday.

Huawei said its first-half performance was in line with forecast. While the Shenzhen-based company is privately held, it voluntarily discloses key financial data on a regular basis.

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The improved results followed Huawei’s efforts to survive US sanctions by resuscitating its handset business and diversifying into new industries, including cloud computing and electric cars.

In the second quarter, Huawei resurfaced as a top-five smartphone vendor in mainland China, according to data from research firm IDC, following the launch of high-end handsets including its P60 series and foldable Mate X3 model.

Huawei shipped a total of 14.3 million smartphones in China in the first half of 2023, up nearly 40 per cent compared to the same period last year, IDC data showed.

Huawei is expected to resume its release of 5G smartphones by the end of this year, as it gets a fresh supply of chips from local suppliers, according to a Reuters report last month that cited three unnamed research firms.

A Huawei Aito SUV seen at a showroom in Beijing. Photo: EPA-EFE

Revenue from intelligent automotive solutions, another segment that Huawei has been banking on to diversify its business, reached 1 billion yuan in the first half of 2023.

Cloud computing and digital power generated 24.1 billion yuan and 24.2 billion yuan in sales, respectively, posting “strong growth” according to Meng Wanzhou, daughter of Huawei founder Ren Zhengfei, who took up the rotating chairwoman role for the first time in April.

The company has also been stepping up efforts to serve enterprise clients hoping to upgrade their operations in traditional businesses. Last month, Huawei joined the heated artificial intelligence race with the third generation of its Pangu model that focuses on industrial uses in sectors like coal mining, finance and government.

“Huawei has been investing heavily in foundational technologies to harness trends in digitalisation, intelligence and decarbonisation, focusing on creating value for our customers and partners,” Meng said.

From January to June, revenue from Huawei’s information and communications technology business – its key segment that includes 5G network gear – reached 167.2 billion yuan, the company said.

South China Morning Post