Key Points
- Huawei reported a 13.7% drop in net profit to 62.9 billion yuan despite increased revenue in 2023’s first nine months.
- Revenue climbed to 585.9 billion yuan from 452.3 billion yuan, driven by strong consumer and automotive sectors.
- Huawei reentered the 5G premium smartphone market with its Mate 60 and P series, boosting sales.
- Its smart car components unit also contributed to revenue growth as demand for automotive tech rose.
Chinese tech giant Huawei reported a significant dip in net profit despite a substantial increase in revenue for the first nine months of 2023, according to a statement released to the Shanghai Clearing House on Thursday. Net profit fell 13.7% year-over-year to 62.9 billion yuan ($8.83 billion) for January-September. During the same timeframe, however, the company’s revenue surged to 585.9 billion yuan, up from 452.3 billion yuan in 2022, signaling strong sales performance across multiple business units.
While Huawei did not break down the earnings of its various divisions, the company noted robust performance in its consumer business, which covers smartphones, PCs, and smart car components. Of particular note was a strong rebound in smartphone sales, as Huawei recorded a 42% increase in sales in China during the third quarter, according to data from the research firm IDC.
Huawei’s recent focus on premium 5G smartphone models has been a key factor in its revenue growth. After a challenging period due to U.S. sanctions limiting access to key components and software, the company reentered the 5G market with its Mate 60 series last year and its high-end P series this year. The company’s move back into the 5G smartphone market marks a strategic comeback in a competitive field dominated by rivals like Apple and Samsung.
The company’s decision to invest in its smart car components business has also yielded favorable results, with demand growing steadily for its advanced technology in the automobile sector. Huawei’s automotive technology unit has been leveraging its experience in telecommunications and AI to develop components that are now featured in vehicles from partner companies, positioning Huawei as a significant player in the global smart vehicle market.
Despite its strong performance in the consumer and automotive sectors, Huawei has continued to face pressure from ongoing U.S. sanctions, which affect its access to advanced chips and other critical technology. These restrictions have pushed Huawei to focus on developing in-house solutions and have contributed to its reduced profit margin, even as revenue has grown.
Huawei’s strategic pivot into premium markets and high-growth sectors like smart automotive technology and 5G-enabled smartphones underscores the company’s resilience and adaptability. Even as it navigates regulatory hurdles, Huawei’s efforts to diversify its product lineup could pave the way for more consistent revenue growth.
