Antonio Manaytay Tech 10.27.2022 11:Oct AM EDT

Huawei Registers 2% Decline of Revenue in The First Nine Months

Huawei Technologies Co. registered a two percent decline in its revenue for the first nine months of 2022. A top official said on Thursday, Oct. 27.

The Chinese tech company's two-percent revenue drop was lower than the 5.9 percent revenue drop in the first six months of 2022. It did not disclose its net profit for the same period, a practice that has been going on for nearly two decades.

In Line With Expectations

Despite the drop, Eric Xu, Huawei's chairman for the current year, said the financial picture was within the projections of the company.

He said that Huawei's device business has slowed down, but the information and communications tech business continued to grow.

Its main business, which sells products and services, posted a profit margin of 6.1% during the same period, which is lower than last year's 10.2%.

The company, he said, will tap new talents and invest in research and development to "take the competitiveness of our products to a new level."

The Chinese tech company is struggling with US sanctions curbing its access to advanced chips that affect the bottom line of its profitable smartphone business.

US-China Trade War

Huawei reaped the whirlwind of the US-China trade war. The trade war was later shaped into a tech war between the two of the world's largest economies.

The bitter trade battle started when US President Donald Trump accused China of unfair trading practices. The former US president also called the Asian economic superpower an intellectual property theft.

The US imposed tariffs on Chinese goods valued at more than $360bn (£268bn). China hit back by imposing tariffs on more than $110bn of US products.

Trump delivered three rounds of tariffs in 2018. Another round was imposed in 2019. China also responded in kind.

China viewed the accusation as an attempt to curb its rise as an economic power.

Huawei in the Eye of the Storm

As a result of the trade battle between the two economic powers, the fast-growing Chinese tech company found itself in the eye of the storm.

The US put the company on its Entity List in 2019, which required Huawei to secure a license if it entered into business with American companies.

Another US Ban

Already reeling from trade restrictions, Huawei sees more trading difficulties after the US Federal Communications Commission is poised to ban the approval of new equipment Huawei will supply to US telecom companies.

The ban will practically strangle the life out of the Chinese tech company's robust smartphones business. Huawei dominated global smartphone sales in 2020 ahead of its two rivals, Apple and Samsung Electronics,

In 2021, the Chinese tech company saw its shipments plunge by 82%.

Staying Relevant

The fall of its smartphone business did not deter Huawei from staying relevant.

Huawei focused on the high-end sector of the smartphone market. Along this direction, the company unveiled its flagship Mate 50-series.

The new flagship phones were rolled out last month, with a projected launch in Europe at a later date.

While able to stay alive amid US sanctions, Huawei is preparing for the coming trouble the global economy will be facing.

In an internal memo to employees, a copy of which was leaked to the South China Morning Post, company founder Ren Zhengfei warned of the coming of a troubled global economy,

Focus on profitability to survive. He urged the employees.