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| Huawei revenue drops as warning of a challenging year |
Chinese tech giant Huawei said on Wednesday that its first-quarter sales fell sharply due to US sanctions affecting its business.
For the three months ending March 31, Huawei's revenue fell 16.5% year-on-year to 152.2 billion yuan ($ 23.5 billion).
This was the second consecutive quarter with the Chinese company's sales declining.
This is mainly due to issues with Huawei's consumer business unit, which also includes smartphones and other devices.
Since the two companies split in 2019, Huawei is no longer able to equip its phones with the Google licensed Android operating system.
In the last quarter of 2020, Huawei smartphone shipments decreased by 41%.
Last year, the company sold its Honor smartphone brand to a group of investors.
And in 2019, the company was blacklisted by an American company called the Entity List, which prohibits American companies from exporting technology to some foreign companies.
By 2020, the United States has begun to reduce the company's supply of major chipsets required for smartphones.
“2021 will be another challenging year for us, but it will also be the year in which our future development strategy takes shape,” Eric Shaw, chairman of the revolving company, said in a statement.
He added: We thank our customers and partners for their continued trust. Regardless of the challenges we face, we will continue to maintain business resilience to survive and do so in a sustainable way.
Huawei managed to increase its profit margin from the previous year by 3.8 percentage points to 11.1%.
One reason for this is that Huawei received $ 600 million in patents this quarter.
The company announced in March that it had begun criminalizing smartphone makers for using its patented 5G technology.
Huawei has thousands of patent families for 5G networks, and the company hopes this segment of the business will provide a new source of revenue for its other companies.
The company announced on Wednesday that it will increase its investment in software to integrate software and services into its revenue mix.
With US sanctions damaging equipment, the company has ramped up its efforts in software, particularly in areas like cloud computing and smart cars.