Chinese electronics giant Huawei announced Tuesday that it booked RMB 188.2 billion (USD 25.7 billion) in revenue for the first three months of this year, up 1.4% year-on-year (YoY), according to the company’s website.
This marks the slowest growth rate in recent years for Huawei, which reported a 19.1% YoY revenue increase in 2019 and a 19.5% YoY revenue increase in 2018. The company added that its net profit margin in the first quarter was 7.3%, down from 8% in Q1 2019.
The firm didn’t disclose other data such as a breakdown in revenues by business segments.
Huawei said that “its overall business in Q1 2020 is in line with expectations,” adding that the firm is making efforts in coping with various challenges from the COVID-19 outbreak which has affected markets worldwide.
China’s mobile market, the world’s largest, has been on a seemingly self-perpetuating downward spiral of smartphone shipment. In the last quarter of 2019, China saw its smartphone market declining for the 10th consecutive quarter in succession, according to Counterpoint, a trend that continued in 2020. A total of 6.38 million mobile phones were shipped in February 2020, representing a 56% drop year-on-year, and the lowest monthly shipments number in eight years, KrASIA reported.
In February, Xiaomi surpassed Huawei to become the third-largest vendor worldwide in the month, based on number of smartphone shipments. Xiaomi shipped 6 million devices, down by 32% YoY that month, while Huawei delivered 5.5 million smartphones, down by 69% YoY.
Another challenge affecting Huawei is the of lack of Google services on new smartphones due to an ongoing US ban affecting the Chinese firm.
“The external environment will only get more complicated going forward,” cautioned Huawei’s rotating chairman Eric Xu when delivering the company’s 2019 full-year earnings.
Reuters reported in March that senior officials in the Trump administration agreed to new measures to restrict the global supply of chips, which are aimed to curb sales of chips to Huawei by Taiwan Semiconductor Manufacturing Co, a major producer for Huawei’s HiSilicon unit and the world’s largest contract maker.