The sanctions specifically target the sale of all Huawei products worldwide. Huawei also does not have access to hardware and software manufactured by US companies. Huawei’s CEO has previously stated that the supply of chips is one of their main concerns. Due to the sanctions, Huawei was forced to use 4G Snapdragon chips instead of 5G in its products. As per the company’s announcement, they made 634 billion yuan ($99.5 billion) in 2021, which shows a decrease of 29% compared to last year. “In 2021, despite all the trials and tribulations, we worked hard to create tangible value for our customers and local communities,” said Huawei rotating chairman Guo PingGuo in an official statement. “We enhanced the quality and efficiency of our operations and expected to round off the year with a total revenue of 634 billion yuan.”
Huawei Mobile is not in a great spot
According to Huawei rotating chairman Guo PingGuo, the smartphone segment has suffered the most. However, he said that everything was exactly as predicted, and they expected such a reduction in income. Following US sanctions, Huawei was forced to sell the subsidiary brand HONOR. HONOR was one of Huawei’s most successful subsidiaries, accounting for a high percentage of the company’s product sales. Huawei had a heavy investment in its Android-based Harmony OS and developing apps for its smartphones to maintain its independence from Google. To date, Harmony OS is running on over 200 million Huawei devices. Sales of Huawei smartphones in the Chinese market are expected to continue. Focusing on 5G and telecom services is also one of Huawei’s ways to offset financial losses. However, Huawei must forget the international markets.
Things can get even worse for Huawei
If we want to infer from the facts, it does not seem that Huawei has an obvious way out of this situation. US President Joe Biden recently signed a new bill to impose more sanctions on Huawei and other Chinese companies. The latest round of sanctions will definitely make things more critical for Huawei. Huawei has recently decided to license its smartphone designs to third parties to bypass US sanctions. China Postal and Telecommunications Appliances Co. (PTAC) will help Huawei sell its smartphones.
