The cloud saves Huawei’s accounts, all the details
In the first half of 2022, Huawei's turnover fell by 6 percent: the smartphone segment is bad, while the cloud computing segment is growing. All the details
On Friday, Chinese technology company Huawei reported a 6 percent year-over-year decrease in its revenue in the first half of 2022, to 301.6 billion yuan ($ 44.7 billion).
Despite the overall decline, sales recorded by its enterprise segment – which includes cloud computing technologies – grew by 28 percent to 54.7 billion yuan, offsetting the weak performance of the smartphone segment.
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The contraction in turnover in the first half of 2022, explains the Financial Times , still represents an improvement for Huawei compared to 2021, when its revenues had plummeted by 29 percent due to the United States, which had imposed a series of trade restrictions in the against the company to prevent it from accessing crucial technologies and components.
THE SMARTPHONE CRISIS
Those measures particularly affected the smartphone segment: Huawei was struggling to procure the semiconductors needed for the devices, and in order to survive it was in fact forced to proceed with the sale of Honor, which in 2020 had been one of its main smartphone brands.
Phones continue to be the main driver of Huawei's consumer segment, but in the first half of 2022, sales dropped 25 percent due to low market demand.
NET PROFIT MARGIN ALSO FALLS …
The company then said its net profit margin stood at 5 percent in the first half of the year, down from 9.8 percent in the same period in 2021.
… BUT THE CLOUD DIVISION IS GROWING
On the other hand, Huawei's cloud computing division got the better of its competitors – for example, Alibaba, Jack Ma's Chinese tech group known primarily for e-commerce – in winning contracts for these services.
CHINA'S CLOSE ON THE TECH SECTOR
Chinese technology companies such as Alibaba and Tencent derive roughly half of their cloud sales from providing services to domestic IT companies, which are undergoing regulatory squeeze from Chinese authorities.
Zhang Yi, cloud computing expert at Canalys, explained to the Financial Times at the time that "the Chinese market is entering a new era in which the customers driving demand are no longer Internet companies but those of traditional sectors, including state-owned enterprises ".
THE HUAWEI ADVANTAGE
"Huawei's relationship with the government is really good, which helps get the business out of the way," Zhang added.
Moreover, Huawei is also a leading provider of private cloud services , a market segment often preferred by state-owned enterprises and various local governments in China.
WHO CONTRAST HUAWEI ABROAD
Abroad, however, many governments have decided to exclude Huawei from the list of suppliers for the 5G network, the fifth generation standard for mobile phone technologies. The latest was Canada , last May, lining up with the rest of the Five Eyes, the intelligence-sharing alliance with Australia, New Zealand, the United Kingdom and the United States.
– Read also: What China does (and will do) on microchips, telco and digital
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/huawei-cloud-fatturato-primo-semestre-2022/ on Tue, 16 Aug 2022 10:11:43 +0000.