China’s largest telecommunications company, Huawei, has revealed its biggest-ever decline in revenue in the first half of 2021 – it fell by almost 30%, to ¥320 billion (£35.5 billion).
Analysts say the sanctions imposed by the US government have been a contributing factor to the company’s decline.
It’s no surprise that Huawei is feeling the pinch when it comes to sanctions. These restrictions have made it extremely difficult for them to buy components and software that utilises US technology.
Huawei’s consumer electronics arm, which includes phones, has seen a 47% decline in revenue.
Huawei claims that the recent chip shortage has had a large impact on its business.
The company’s consumer devices chief acknowledged the challenges it faced earlier this year.
“US sanctions have posed great difficulties to our business operations and day-to-day work,” Richard Yu, said as the company announced the launch of a new phone.
Mandated sanctions are also preventing Huawei’s devices from working fully with Google’s Android operating system. In response to this, the company has been forced into expanding its own Harmony OS in their smartphones and tablets.
Huawei’s telecoms equipment business also experienced a decline in revenue.
Reuters reported that a company spokesperson said this was due to the slow rollout of 5G in China.
However, Sales outside of China increased in spite of US pressure placed on its allies to exclude Huawei from 5G infrastructure over national security concerns.
Huawei has vehemently denied claims that its equipment poses a security risk, saying the allegations are politically motivated.
The company has seen growth from its enterprise and cloud services businesses.
It said, Efficiency improvements also saw profit margins increase.
Mr. Xu Zhijun (Eric Xu) Deputy Chairman of the Board and Rotating Chairman of Huawei said: “Our aim is to survive, and to do so sustainably”.