Chinese tech giant Huawei has reported a 28% decline in net profits for 2023, attributing the drop to international economic uncertainty and weak domestic consumption. The Shenzhen-based company announced on Monday that its net profit stood at 62.6 billion yuan ($8.6 billion), down from 87 billion yuan in the previous year.
Despite the decline in profits, Huawei’s revenue increased by 22% to 862.1 billion yuan, marking its third consecutive annual revenue rise since the pandemic-induced downturn in 2021. The company’s revenue figures are the highest since it surpassed 890 billion yuan in 2020.
Impact of US Sanctions
Huawei has been at the center of geopolitical tensions between China and the United States. Since 2019, Washington has imposed sanctions on the company, restricting its access to US-made components and technology over concerns that its equipment could be used for espionage by the Chinese government—allegations that Huawei denies. These restrictions initially disrupted Huawei’s smartphone production, forcing the company to diversify its business strategy.
In response, Huawei has focused on self-sufficiency, unveiling its first smartphone with a fully homegrown operating system in 2023. It also launched the world’s first triple-folding phone, strategically timed on the same day as Apple’s latest iPhone release. While Apple remains a strong competitor in China, Huawei has regained market share against Western rivals.
Global Scrutiny and Challenges
Huawei remains a leading global supplier of 5G equipment and has been involved in infrastructure projects worldwide. However, the US has continued to pressure its allies to exclude Huawei from their 5G networks, citing security concerns. In Europe, the company faces additional challenges due to a corruption probe within the EU Parliament.
Earlier this month, European authorities sealed Huawei offices and charged five individuals with allegedly accepting bribes to influence EU policies in favor of the company. Lawmakers are set to debate these allegations in a session on Monday, with expectations of calls for stricter regulatory action.
Despite ongoing challenges, Huawei remains committed to its long-term growth, emphasizing product quality as a competitive advantage. The company’s rotating chairwoman, Sabrina Meng, acknowledged the difficulties but reaffirmed its commitment to innovation and resilience in the face of global pressures.
