Huawei’s Revenue Dropped 28 Percent in FY 2021

 Huawei has reported a drop of 28.56 percent in its yearly revenue to 636.8 billion yuan ($100.01 billion) for FY 2021, thanks to a sharp decline in the company’s smartphone business. Owing to the imposed US trade sanctions as well as the ongoing chip shortage, the Chinese smartphone manufacturer is working on readjusting its business portfolio to tap into digitalization and carbon neutrality opportunities.

According to the report, the company’s 2021 revenue stood at 636.8 billion yuan ($100.01 billion), which came down from 891.4 billion yuan in FY 2020. Its net profits, however, soared by 75.9% to 113.7 billion ($17.86 billion). While cash flow from operating activities grew to 59.7 billion yuan ($9.38 billion).

Huawei’s president of device business Richard Yu said that US sanctions would not stop the company from pursuing innovation and that they would continue to navigate customer experience around five key areas including smart home, smart mobility, and entertainment.

Previously, Huawei had taken steps to broaden its product portfolio, as part of its efforts to mitigate the depleting smartphone sales amidst the current US trade bans. Last June, it had released an update of its mobile operating system, HarmonyOS 2, across hundreds of its devices in China, including smartphones, smartwatches, and tablets. The company had previously also tapped into Android as the OS for its smartphones but was forced to look for alternative platforms when US trade sanctions meant Google had to pull back Huawei’s access to its mobile apps and platform.

According to Huawei, sales outside of the Chinese market had dropped across the board. Whereas, this year’s increase in net profits was fuelled by the sale of its Honor and server businesses, as well as improved product portfolios and greater efficiencies from its operations.

The company further shared that its enterprise business registered a growth of 30 percent last year, owing to new business segments that included cloud and digital power registering. According to Huawei’s cloud CEO Zhang Pingan, its cloud unit had a network of more than 2.3 million developers, 14,000 consulting partners, and 6,000 technology partners. Collectively, they supported more than 4,500 cloud products.

Huawei currently administers 61 availability zones across 27 regions, comprising 170 markets. Its digital power business presently runs 12 research centers in various locations in China, Asia-Pacific, and Europe. The company runs 86 technology labs worldwide alongside 23 research and development (R&D) facilities in Europe.

According to the company, its R&D and product reengineering investment increased by 30 percent YoY. It had spent 142.7 billion yuan ($22.41 billion) on R&D last year, which accounted for 22.4% of its overall revenue and pushed its 10-year expenditure to 845 billion yuan.

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