US embargo crashes Huawei’s sales everywhere but China

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Huawei’s business everywhere but China has slumped following the US embargo on the company, according to today’s annual report.

A regional breakdown shows that, while Chinese sales for 2020 rose 15.4% year-on-year, sales elsewhere in the Asia-Pacific were down 8.7%. Sales in Europe, the Middle East and Africa (EMEA) were down 12.2% and sales in the Americas crashed by 24.5%.

Fortunately for Huawei, China accounts for 66% of its total sales. EMEA is 20% and the Asia-Pacific outside China is only 7.3%. Though that focus on China could be said to indicate a global weakness: for years Huawei has used the solid base of its home market to fund R&D and to expand internationally. 

Ken Hu, Huawei’s rotating chairman, tried to put a brave face on it. “Over the past year we’ve held strong in the face of adversity,” he said.

“We’ve kept innovating to create value for our customers, to help fight the pandemic, and to support both economic recovery and social progress around the world. We also took this opportunity to further enhance our operations, leading to a performance that was largely in line with forecast.”

Worldwide the carrier business suffered worst from former US president Donald Trump’s imposition of a ban on US companies doing business with Huawei, after alleging security threats — allegations Huawei has always denied.

New president Joe Biden  has indicated he will not change the US policy towards Huawei, which has been echoed by a number of allies in Europe and elsewhere.

The carrier business rose only 0.2% in the year, despite the fact that 2020 saw a major investment across the world in 5G infrastructure. The consumer business, hurt by the inability of Huawei to use the Android operating system for new phones or the Google Playstore for apps, went up only 3.3%. The enterprise business, however, went up 23.0%.

Huawei noted the rollout of its Harmony OS, an alternative to Android and the Huawei Mobile Services (HMS) ecosystem. It said its “consumer business moved forward with its Seamless AI Life strategy”.