Huawei says revenue will have dropped nearly 30 percent in 2021 due to U.S. sanctions and sees the challenges ahead

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The Chinese telecommunications giant Huawei Technologies, which has been hit by the US sanctions, expects a drop in sales of almost 30 percent in 2021 and forecasts ongoing challenges for the new year. Annual sales are expected to be CNY 634 billion (around Rs.739479606 billion), rotating chairman Guo Ping said in a New Year’s letter to staff on Friday.

This represents a decrease of 28.9 percent compared to 2020 sales of 891.4 billion CNY (approximately 1039453.517 billion rupees).

Guo said the next year will “come with its just challenges,” but he is satisfied with Huawei’s 2021 business development. “An unpredictable business environment, the politicization of technology and a growing deglobalization movement all pose serious challenges,” the letter posted on the company’s website said.

In 2019, the US Trump administration imposed a trade ban on Huawei, citing national security, banning the company from using Alphabet’s Android for its new smartphones, along with other critical US-origin technologies.

The US sanctions weighed on Huawei along with weaker domestic consumption due to the coronavirus.

“We have to stick to our strategy and react sensibly to external forces that are beyond our control,” said Guo.

Huawei will continue to focus on information and communication technology (ICT) infrastructure and smart devices, the letter said. Revenue in the third quarter was down 38 percent year-on-year, according to Huawei’s latest earnings report. Sales in the first three quarters were almost a third below the previous year’s figure.

© Thomson Reuters 2021

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