What happened to Huawei’s accounts after the trumpate
The US sanctions and the economic fallout of the Covid-19 pandemic weigh on Huawei's 2020 accounts. Here's how and how much (even if sales and profits grow)
US sanctions and the economic fallout of the Covid-19 pandemic weigh on Huawei's accounts.
Huawei closed 2020 with annual revenues up 3.8%, to 891.4 billion yuan (about 136.7 billion dollars), slowing from more than 19% growth recorded in 2019, discounting the heavy sanctions imposed by the US on the sale of hi-tech components.
Net profits, the Shenzhen giant reported in a streamed press conference , stood at 64.6 billion yuan (nearly $ 10 billion), an annual growth of 3.2%, down from the previous year. growth of 5.6% the previous year.
Huawei is coming out of its toughest year on record, Bloomberg writes, when Trump administration sanctions stifled its once-leading smartphone business and hindered progress in chip manufacturing and 5G networks.
All the details.
SALES GO UP
China's first global tech brand reported sales increased 3.8% from 2019 to 891.4 billion yuan ($ 135.8 billion).
DOWN GROWTH
However, Huawei's growth is down from the previous year's 19.1% growth.
GOOD IN THE CHINESE MARKET …
Huawei's growth was driven by the domestic market. Sales in China amounted to 584.9 billion yuan ($ 89.7 billion), up 15.4% year-on-year and account for more than 65% of total revenue.
But China was the only region where Huawei operates that experienced positive revenue growth.
… BUT REVENUES DOWN EVERYWHERE
In fact, its business declined everywhere, with revenues down 12.2% to 180.8 billion yuan in Europe, the Middle East and Africa, down 8.7% to 64.4 billion yuan in the rest of Asia and 24.5% to 39.6 billion yuan from the Americas.
HOW THE PROFIT GOES
Huawei said 2020 profit rose 3.2% to 64.6 billion yuan ($ 9.8 billion), slowing to 5.6% growth in 2019.
CASH FLOW DECREASES
Huawei's cash flow from operating activities was 35.2 billion yuan, down 61.5% from the previous year.
THE SALE OF 5G EQUIPMENT
The company's carrier business, which includes 5G network equipment, brought in 302.6 billion yuan, up just 0.2% a year earlier. Huawei is serving US pressure. Under the Trump administration, the United States tried to push allied countries to block Huawei from their 5G networks. Countries including Australia and the UK have blocked Huawei from their 5G networks.
HUAWEI DOES ITSELF WITH ROYALTIES
But the Shenzen giant will not stay on the corner. Huawei will start demanding 5G royalties from Apple and Samsung.
The owner of the world's largest portfolio of 5G patents will negotiate rates and potential cross-licensing with the iPhone maker and Samsung, promising to charge lower rates than competitors like Qualcomm, Ericsson and Nokia.
Charging royalties on key patents related to mobile 5G technology could help Huawei recover at least a portion of the revenue hit in some areas of its business, such as smartphones, as a result of US sanctions.
Huawei is expected to collect $ 1.2 billion to $ 1.3 billion in patent and licensing fees between 2019 and 2021. The license fee is based on the phone's retail price and is capped at $ 2.5 per device. , the company said.
WILL HUAWEI BET ON THE CLOUD?
Finally, as Cnbc points out, a bright spot for Huawei has been its business activity which includes products it sells to companies in various sectors. This could include cloud computing, a big target for the Chinese company recently ”.
In 2020, the company's business reported revenue of 100.3 billion yuan ($ 15.4 billion), up 23% year-on-year, recording the fastest growing of all of Huawei's divisions.
UNDER THE WEIGHT OF US PRESSURES
In 2019, the Trump administration placed the Shenzen giant on an export blacklist. Not only that, Huawei cannot access critical technologies of US origin, compromising its ability to design its own chips.
At the time of inclusion in the Entity list, Huawei was the second largest smartphone operator by market share. But in the fourth quarter, Huawei dropped out of the top five largest suppliers by market share due to the collapse in sales around the world.
Last year, the US tech giant Google ended up cutting off relations with Huawei. This meant that the Chinese giant couldn't use Google's Android operating system on its Huawei and Honor-branded smartphones. While this hasn't been a problem in China, where Google services are blocked, it has hurt Huawei in international markets where consumers are used to these apps.
So much so that in November 2020, the Chinese company sold its Honor low-cost smartphone unit to a consortium of agents and resellers.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/che-cosa-e-successo-ai-conti-di-huawei-dopo-le-trumpate/ on Wed, 31 Mar 2021 10:44:14 +0000.