Ken Hu, Huawei's rotating chairman, speaks during a press conference in Shenzhen on Wednesday. (Photo courtesy of Huawei)

Huawei Grows Amid Pandemic, Sanctions

BY :JAKARTA GLOBE

APRIL 01, 2021

Jakarta. Chinese communication technology giant Huawei managed to increase its revenue in 2020 amid the economic fallout from the Covid-19 pandemic and the United States sanction, thanks to China's robust demand while the company continues focusing on infrastructure and smart devices to serve consumers and enterprises in emerging markets like Indonesia.

Huawei booked a net income of 64.6 billion yuan ($9.92 billion) last year, up 3.2 percent from 62.7 billion yuan a year earlier, the company announced in a live broadcast on Wednesday.

The Shenzhen-based company said its revenue also rose to 891.4 billion yuan, albeit growing at a slower 3.8 percent pace than double-digit growth in the previous years. 

Huawei saw its sales rose 15 percent to 584.9 billion yuan in China, the only region where its sales grew last year. China was the only major economy that kept expanding last year, thanks to its decisive effort to contain the pandemic. 

The company's revenue in the Asia Pacific fell 8.7 percent to 64.4 billion yuan and 12 percent to 180.8 billion yuan in Europe, Middle East, and Africa regions. Huawei's sales in the Americas dropped the most, falling by 25 percent to 39.6 billion yuan. 

The United States blacklisted the company in 2019, alleging Huawei might pose a national security threat due to its ties with the Chinese government.

Huawei has repeatedly denied the claim. Huawei is a private company wholly owned by its 121,269 employees who elect the company's officials and ensure the company's independent operation, it said in its annual report. 

Nevertheless, the blacklist caused many American companies could not sell certain technologies, like Google's Android mobile operating system, to Huawei.

Last year, then-President Donald Trump introduced a new trade sanction against China — which was continued by his successor Joe Biden — that cut off Huawei from US smartphone chip suppliers, further adding pressure to the company's supply chain. 

Ken Hu, Huawei's rotating chairman, said the sanction was "unfair" for the company. He also noted that the sanction also made Huawei's suppliers in the US lose between $10 billion to $20 billion in annual sales with the company. 

"For the industry, it's a lose-lose situation," Hu said. 

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Huawei's 2020 revenue breakdown. (JG Screenshot)

The US also lobbied its allies, including the United Kingdom and Australia, to block Huawei's tech in their 5G network. In turn, Huawei reported its carrier business only grew by 0.2 percent to 302 billion yuan last year.  

Huawei’s smartphone sales also did not fare any better. The company said its consumer business still booked a rising revenue to 482.9 billion yuan last year, up 3.3 percent from a year earlier. But, the pace was far slower than a 34 percent increase seen in 2019.

Still, Hu was confident the company has what it takes to face the challenges. 

"Over the past year, we've held strong in the face of adversity," Hu said in a statement. 

"We've kept innovating to create value for our customers, to help fight the pandemic, and to support both economic recovery and social progress around the world. We also took this opportunity to enhance our operations further, leading to a performance that was largely in line with the forecast," he said. 

On the bright side, Huawei reported double-digit growth in its enterprise business, which selling services like artificial intelligence, cloud computing, and intelligent digital solutions to enterprises. The company earned 100.3 billion yuan in revenue from enterprise business globally, up 23 percent from a year earlier. 

One example of the business was a smart healthcare service the company set up in more than 1,500 hospitals in Indonesia, Turkey, and Germany, among other countries. 

Jay Chen, the vice president of Huawei Asia Pacific, said Indonesia was one of the "very potential" countries for Huawei. 

"We have a very good partnership with Indonesian customers. We already work with every mobile operator in Indonesia," Chen said on Wednesday. 

"Beyond the operator business, we also see potential opportunity in enterprises business," Chen said. 

The company also supports Indonesia's aspiration to develop the country's $44-billion digital economy by pledging to an ambitious goal of training 100,000 digital talents in five years, Chen said. 

 

 

 

 

 

 

 

 

 

 

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