Once, global smartphone giant Huawei copped a high-profile scalping when US lawmakers under former president Donald Trump introduced sweeping technology sanctions against China in 2019.
Today’s trading update, however, offered a surprising bump in revenues, suggesting the crestfallen Chinese multinational’s diversification away from the smartphone market is showing signs of paying off.
Though the trading update was rather austere, it underscored top-line revenues of 310.9 billion yuan (£33.8 billion) on a 15% profit margin.
These limited figures suggest net profits of 46.6 billion yuan, a fairly remarkable threefold increase year on year.
In fairness, this figure was flattered by deferred income arising from Huawei’s disposal of mobile maker Honor in 2020, alongside parts of its server business.
Regardless, the revenue mix offered insight into how Huawei is managing to stay afloat after being effectively squeezed out of the US smartphone market, once its bread and butter.
Huawei’s ICT (information and communications technology) infrastructure business, which includes 5G infrastructure rollout, contributed 167.2 billion yuan compared to its consumer business’ (i.e. smartphones) revenues of 103.5 billion yuan.
Cloud, digital power, and a nascent automotive segment picked up the remainder.
This means that Huawei’s once-mighty mobile business is around 60% the size of its ICT segment.
For context, mobile was around 16% bigger than ICT in 2018, before sanctions hit.
Sabrina Meng, Huawei's rotating chairwoman, thanked “the entire Huawei team for its solidarity and dedication” in today’s trading update.
She continued: “Huawei has been investing heavily in foundational technologies to harness trends in digitalization, intelligence, and decarbonization, focusing on creating value for our customers and partners.
In the first half of 2023, our ICT infrastructure business remained solid and our consumer business achieved growth. Our digital power and cloud businesses both experienced strong growth, and our new components for intelligent connected vehicles continue to gain competitiveness."