Huawei expects gross sales to say no 28.9% in 2021 because the sanctions drag on
A Huawei store in Hangzhou will display the company’s newly launched foldable smartphone, the P50 Pocket, on December 23, 2021.
Long white | Visual China Group | Getty Images
BEIJING – Chinese telecommunications giant Huawei said Friday it expects revenue of 634 billion yuan ($ 99 billion) for this year, down 28.9% from last year.
The company suffers from US sanctions, semiconductor shortages and a global slump in demand for smartphones.
The full-year estimate for 2021 shows Huawei’s revenue for the second half of the year decreased from 320.4 billion yuan in the first half to 313.6 billion yuan.
The company had sales of 891.4 billion yuan in 2020, 3.8% more than the previous year. That’s much slower than the 19.1% year-over-year increase reported for 2019, with sales of 858.8 billion yuan.
The release on Friday came as part of an internal New Year’s message from Huawei’s rotating chairman Guo Ping, who was focused on attracting employees to keep going.
The letter did not give reasons for the decline in expected revenue, but according to an English-language version consulted by CNBC, it cited “serious challenges” from “an unpredictable business environment, the politicization of technology and a growing deglobalization movement.”
Guo added, “Over the past year, our carrier business has been stable, our enterprise business has seen solid growth, and our device business has expanded rapidly into new areas of business.”
For the next year, Guo said, the company’s goals include increased efforts to develop and recruit talent and develop technology for the automotive industry.
Last week, Huawei announced that delivery of the first electric car with the HarmonyOS operating system is expected to begin at the end of February.
Huawei usually publishes its more detailed annual report in March.
The numbers released for the first half of 2021 showed that the two largest business areas, Consumer and Carrier, posted sharp declines compared to the previous year. The much smaller corporate business, which has become a central part of Huawei’s growth strategy, grew by 6.6 billion yuan.
Read more about China from CNBC Pro
In 2019, former President Donald Trump’s administration blacklisted Huawei, citing national security concerns, preventing American companies from selling technology to the Chinese company. Huawei has denied that it poses such a threat.
While these restrictions have not been relaxed, other tensions between Huawei and the US government have been relaxed.
CFO Meng Wanzhou, daughter of founder Ren Zhengfei, returned to the company’s headquarters in Shenzhen this fall after reaching an agreement with the US government on wire fraud charges.
Meng had fought against extradition from Vancouver to the United States, where she was arrested in December 2018. She has spent most of the past three years under house arrest, where her bail orders of 10 million Canadian dollars ($ 7.9 million) allowed her to face security pursuits during the day.