Huawei manages third-quarter revenue growth as US restrictions bite

Platform News: Huawei Technologies

Huawei Technologies managed a profit in the third-quarter revenue as the effect of the coronavirus pandemic added to supply-chain woes brought about by US restrictions on doing business with the Chinese company.

The figure includes a day after the telecommunications equipment manufacturer announced its most recent flagship smartphone, possibly its final from the high-end Android section most dependent on US technology.

Additionally, it comes following Sweden became the latest nation to prohibit Huawei from the fifth-generation (5G) network infrastructure, even after US suspicion of Huawei’s relationship with China’s communist government – that Huawei rejects.

Hinting at an limit to at least four years of double-digit growth, revenue grew 9.9% in January-September versus the exact same period a year earlier to 671.3 billion yuan (approximately $100.4 billion), the private firm said in an announcement on Friday without providing a segment breakdown.

Revenue for the third quarter alone rose 3.7% annually to 217.3 billion yuan, calculations made by our content partners Reuters showed.

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Net profit margin for the nine months was 8.0%, versus 8.7% over the same period a year earlier, Huawei said.

Huawei’s line of Kirin chips, designed in-house, helped catapult the firm to the top of the global handset market.

Earlier this year, however, Consumer Business Group CEO Richard Yu said US restrictions meant Huawei would soon stop making high-end Kirin chips. Analysts expect its stockpile of the chips to run out next year.

On Thursday, Yu in a livestream unveiled Huawei’s latest flagship smartphone series, the Mate 40.

The device, priced at 4,499 yuan for the feature-light version, comes equipped with the Kirin 9000 chipset, manufactured at the 5nm process node that only Apple and Qualcomm have been able to bring to market at scale.

The Mate 40, however, could be the company’s last device of its kind. Already, consumers in China have rushed to buy Huawei smartphones on concerns over the availability of newer models.

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Meanwhile, overseas, sales have been sluggish due in part to US restrictions blocking Huawei’s access to Alphabet Inc’s Google Mobile Services.

Mo Jia, who tracks the global smartphone sector at research vendor Canalys, said the Mate 40 will likely sell well in China though total sales will suffer from supply-chain issues.

“Huawei won’t find it tough to market the Mate 40 series, because the majority of the dispatch will visit China,” Jia said. “But it could only create small units powered by the Kirin 9000 show, which can affect the amount of those Mate 40 phones it can ship.”

Reflecting its production problems, journalists at our partner news agency Reuters reported last week that Huawei was speaking to Digital China Group and others to sell components of its Honor budget handset company in a deal which could bring up to 25 billion yuan.

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Premium rival Apple started selling among its most recent flagship iPhones in stores worldwide on Friday, with analysts expecting the US company to take market share from Huawei since the pair dominate the high-end handset section in China.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by David Kirton in Shenzhen and Josh Horwitz and Brenda Goh in Shanghai. Editing by Miyoung Kim and Christopher Cushing.

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