Huawei Reports Biggest Annual Profit Decline of 69%
Chinese technology giant Huawei reported a net profit of 35.6 billion yuan ($5.18 billion) for 2022, marking a 69% year-on-year decline and its largest annual profit plunge since 2011. The decline was blamed on a challenging external environment due to US sanctions, China’s strict pandemic controls in 2021, and a one-off gain related to the sale of Honor last year.
However, revenue rose 0.9% to 642.3 billion yuan in 2022 as the company sought to diversify into new areas, such as cloud computing and automotive technology. Huawei’s consumer business, which includes its smartphone unit, fell 11% to 214.5 billion yuan in 2022. In contrast, its carrier business, which includes equipment sold to telecommunications companies, saw a year-on-year rise of 0.9% generating 284 billion yuan in revenue.
The enterprise business, which includes cloud computing revenue, rose 30% year-on-year to 133.2 billion yuan. Huawei also launched its own operating system, HarmonyOS, which it said was installed on 330 million devices at the end of 2022, up 113% year-on-year. However, it failed to gain traction outside of China.
Huawei Seeks to Diversify Business Following Challenging Years
Despite Huawei’s profit decline, the company managed to stabilise its business and diversify into new areas such as cloud computing and automotive technology. In the midst of the storm, Huawei continued to serve its customers and maintained business continuity.
The Chinese telecommunications giant has struggled to sell devices outside of China after being cut off from key American technology, such as Google’s Android operating system, due to US sanctions in 2019 and 2020. Huawei has also faced challenges in its carrier business as countries, including the UK, banned the company from their next-generation 5G networks. Huawei has sought to offset these challenges by diversifying into new areas and taking its products, including cloud computing, to specific industries such as finance and mining. Huawei also launched vehicles in partnership with automaker Seres and its nascent “Intelligent Automotive Solutions” unit brought in 2.1 billion yuan in 2022. The company said it invested $3 billion in the unit since it was established in 2019 and now has 7,000 research and development staff.
