Telecom provider and smartphone vendor Huawei booked RMB 858.8 billion (USD 121 billion) in revenue in 2019, up 19.1% year-on-year, but 0.4 % lower than the YoY growth rate recorded in 2018, according to the company’s latest financial report.
The year’s performance affirms founder Ren Zhengfei’s predictions from the beginning of last year, when Ren said that he expected Huawei’s revenue growth to fall below 20% at USD 125 billion at best, citing international markets headwinds.
In a breakdown by region, Huawei’s revenue growth from Asia Pacific, excluding China, went down 13.9% year-on-year (YoY) to reach RMB 70.5 billion, due to fluctuations in carrier investment cycles in some countries and denied access to the Google Mobile Services ecosystem in the consumer business. Revenues from this region, the company’s third largest market, accounted for 8.2% of all revenues.
Huawei’s revenue from its second largest market—EMEA market (Europe, the Middle East and Africa), increased 0.7% YoY.
Revenues from Americas, the fourth largest market, increased 9.6% YoY although the company ceased business operations in the United States since the company was included in the Entity List in 2019. Revenue growth in the region was driven by new digital infrastructure building and the company’s mid-range consumer products rolled out in Latin America.
Huawei witnessed a 36.2% YoY growth in the Chinese market, which accounted for 59% of its entire revenue.
When viewed by segments, sales revenue from Huawei’s carrier business reached RMB 296.7 billion, up 3.8% YoY, the slowest among its three business segments.
Sales revenue from enterprise business reached RMB 89.7 billion, up 8.6% year-on-year.
Sales revenue from consumer business reached RMB 467.3 billion, up 34% year-on-year. The company shipped a total of 240 million smartphones, up 16.5% year-on-year last year, outperforming all other vendors in China, who likewise saw their sales slump. However, Huawei shipped only 5.5 million smartphones in Februray 2020, down by 69% year-on-year, even lagging behind Xiaomi, KrASIA reported earlier this month.
Huawei reported RMB 62.7 billion in net profit in 2019, up 5.6% year-on-year, marking the slowest growth rate in three years.
“The external environment will only get more complicated going forward,” cautioned Huawei Rotating Chairman Eric Xu.
Reuters reported last week 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.
During a Q&A session following Huawei’s livestreamed earnings release, Xu said the company believed that, in such an event, the Chinese government will take countermeasures such as banning smartphones and chips made by US companies from being used in China.