Huawei has announced its earning results and showed that it is facing slow growth this year as the Chinese smartphone giant said that “its operation and productions face significant challenges.”
In the brief announcement, the tech giant didn’t specify the trade restrictions, which the company has faced several trade restrictions by the U.S. government. No one knows the complete impact of the policies. The reason is that the U.S. government has given the telecom giant a few waivers. This will delay the ban on commercial trade with ZTE and Huawei until May 2021.
During the first three quarters of 2020, the Chinese smartphone giant obtained revenue of 671.3 billion Yuan. This is an increase of 9.9% every year, with a profit margin of 8%. According to the company, the results met the expectations. However, it represents a drop in performance during the same period last year. Previously, Huawei reported a 24.4% growth with a profit margin of 8.7%.
The company stated that “The world is grappling with the COVID-19 pandemic. So, our supply chain is under pressure and its operations and productions face major challenges. The company will do its best to find solutions and move forward, and fulfill its duty to the customers.”
Other U.S. restrictions include the one which would ban Huawei from using U.S. hardware and software in certain semi-conductor processes. This has forced it to find other sources for the chips.
Other than the U.S., Huawei is also facing scrutiny by several other countries, like the United Kingdom.
Replacing the Huawei equipment also presents significant challenges for telecom, as Huawei is one of the biggest suppliers in the world. In the previous month, the U.S. Federal Communications Commission said that it’s going to cost $1.837 billion to replace the ZTE and Huawei equipment.
However, 2020 has been an awesome year for Huawei in some aspects. In July, a report from Canalys found that Huawei took over Samsung as the leader in the global smartphone shipments during the second quarter of 2020. This is a huge milestone. It is the first time in nine years that Samsung and Apple didn’t get a place in the Canalys’ charts. This was partly due to the fact that the smartphone shipments have been low during the COVID-19 pandemic, but also Huawei was helped by the sales within China.
