SINGAPORE (AP) — Chinese telecommunications equipment and smartphone maker Huawei’s sales fell 14% in January-March from a year earlier as it pumped money into research and development while facing U.S. sanctions, according to figures released by the company on Thursday.
Huawei Technologies said its revenue was 131 billion yuan ($19.8 billion) in the first quarter of 2022, up from 152.2 billion yuan a year earlier.
Its net profit margin for the quarter was 4.3%, compared to 11.1% in the same quarter of 2021.
Huawei rotating chairman Ken Hu said the numbers were “in line with expectations”.
“Our consumer business has been heavily impacted and our ICT infrastructure business has seen steady growth,” he said.
In 2019, Shenzhen-based Huawei was placed on a trade blacklist that barred US companies from doing business with the major supplier of networking equipment and smartphones. The sanctions hit Huawei hard as it relied on Google services and other key technologies for its handsets.
Once the world’s largest smartphone maker, Huawei fell from the top five brands in 2020 due to sanctions, and in 2021 it also fell from the top five in China as it grappled with a shortage of chips.
The company has since invested heavily in research and development, spending some 142.7 billion yuan ($21.6 billion) to develop new technologies as it seeks to carve out new, less vulnerable business areas. to penalties. Its R&D spending accounts for 22.4% of its sales, outpacing rivals such as Samsung and US tech companies such as Apple.
Earlier this week at its annual analyst summit, Hu reiterated Huawei’s commitment to developing new business areas such as cloud computing and 5G.
Since being blacklisted in the US, Huawei has also developed its Huawei Mobile Service platform to circumvent its lack of Google services. The platform allows developers to launch apps for Huawei devices, although Google apps such as YouTube can only be accessed through shortcuts that take users to its mobile site.
The company also sold off its low-cost Honor smartphone brand in November 2020, hoping to boost sales by insulating it from Huawei sanctions.
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