Huawei brushes aside US sanctions with continued strong growth
US hostility seems to have had minimal effect on Chinese telecoms giant Huawei’s numbers, with strong growth reported across the board.
For the first three quarters of this year Huawei brought in CNY610.8 billion in revenue, which was a year-on-year increase of 24%. The first two quarters of the year recorded 23% revenue growth so, if anything, business is picking up. With the rollout of 5G ramping up it’s not surprising to see kit vendors’ revenue numbers pick up, but it’s nonetheless surprising to see how little impact all the US aggro seems to have had on the Huawei top line.
It should be noted that Huawei isn’t a public company, so there will be limited, if any, independent auditing of these numbers. Having said that the financial commentariat seems happy to take them at face value, so we will too. Huawei says the numbers are compiled in compliance with the International Financial Reporting Standard.
On the networking side Huawei now claims it has signed 60 commercial 5G contracts, which is ten more than a quarter ago. It also says it has shipped 400,000 5G Massive MIMO active antenna units, which seems like a lot. Huawei dropped some numbers about how many big companies are partnering with it over digital transformation, but the other key metric is cumulative smartphone shipments, which Huawei puts at 185 million units, an annual increase of 26% that indicates Q3 numbers of 67 million, which is impressive.
It’s hard to imagine, however, that the Android situation won’t have a profound effect on Huawei smartphone sales in the coming quarters, and the Q3 numbers could have been boosted by discounting to shift stock before that effect kicks in. Regardless Huawei’s numbers are holding up very well, considering the geopolitical headwinds it faces. Maybe this puts the presumed power of the US over global trade in a new perspective.
UPDATE 13:30 16 Sep 19: Huawei didn’t have much to add on the numbers, but Victor Zhang, President of Global Government Relations, did offer this comment on the recent decision by Germany not to ban Huawei from its 5G network. “Separately, we also welcome the German government’s decision this week on the outline of its 5G deployment plans. Germany’s evidence and standards-based approach and commitment that it ‘will not take a vendor-specific approach’ is to be welcomed, as opposed to politicising crucial decisions on 5G that only hinder technology development and economic progress. By driving competition and creating a level playing field for all 5G network vendors, Germany is ensuring consumers and businesses will benefit from high security standards and an advanced digital economy.”