“Because of the unfair sanctions placed on us by the US, our mobile phone business saw a revenue decline,” Huawei chairman Ken Hu said at a press conference in Shenzhen following the release of the company’s latest earnings report.
Sales of Huawei’s other consumer electronics — including laptops, tablets and wearable devices -— jumped 65% last year compared to 2019. Huawei has expanded its lineup of connected devices in recent years, and the latest results gives “us more confidence in our strategy,” Hu said.
Despite dismal results in the handset business, overall revenue rose to 891.4 billion yuan ($136 billion) in 2020. And the company posted 64.6 billion yuan ($9.9 billion) in net profit — the highest level it has ever seen, according to a Huawei spokesperson.
But revenue only ticked up 3.8%, while profits rose 3.2%, much weaker than the growth seen in previous years.
“It’s fair to say that in 2020, we saw a slowdown in the growth rate, and yes, life was not easy for us,” Hu told reporters. Huawei was able to maintain growth because of a range of measures it took to shore up its business, including diversifying its supply chain, he added.
Given the continued uncertainty at the smartphone business, “it’s very difficult for us to make a forecast,” Hu noted.
And Huawei isn’t expected to make a roaring comeback anytime soon, according to Varun Mishra, an analyst of mobile devices and ecosystems at Counterpoint Research.
“Dynamics are changing within China, as well as overseas,” he told CNN Business.
Looking ahead, improving the company’s standing in the United States will be crucial to its future in smartphones.
“If the sanctions are not lifted, I don’t see there’s any way they’re able to resurrect their smartphone [business],” said Mishra.