Huawei extols 2019 as ‘extraordinary’ year

Despite political challenges across the world restricting use of its technology, Chinese comms tech giant posts strong yearly increase in sales and profit

Huawei has shrugged off massive US-led restrictions on the use of its technology to produce what it calls a solid business performance in 2019.

For the year ended 31 December 2019, Huawei reported global sales revenue of CNY858.8bn (US$123bn), up 19.1% year on year, and net profit of CNY62.7bn ($9bn), and its cash flow from operating activities topped CNY91.4bn ($13.1bn), up 22.4% year on year.

As part of what it calls its long-term, ongoing investment in technological innovation and research, Huawei invested 15.3% of its 2019 revenue – CNY131.7bn ($18.9bn), back into R&D, which means its total spend in this area over the last decade now exceeds CNY600bn ($86bn).

Highlighting its performance in the enterprise sector, Huawei said its business technology continued to support customers’ digital transformation across industries and help lay the foundations for the digital world. In 2019, sales revenue from Huawei’s enterprise business totalled CNY89.7bn ($12.8bn), up 8.6% year on year, while sales revenue from its carrier business reached CNY296.7bn ($42.5bn), up 3.8% year on year.

Huawei said that globally, more than 700 cities and 228 Fortune Global 500 companies have chosen it as their digital transformation partner. In 2019, Huawei announced its computing strategy, part of which saw the company launch what it claimed was the world’s fastest artificial intelligence (AI) processor, the Ascend 910, and the AI training cluster Atlas 900. Also in 2019, Huawei’s carrier business led the commercial roll-out of 5G networks.

The company also highlighted the contribution its 5G business line had made over the year. In 2019, Huawei, along with carriers, opened a series of 5G joint innovation centres that aim to promote greater collaboration between businesses and innovators in the development of 5G ecosystems. The centres also act as a base for 5G knowledge and skills sharing, aiming to enhance 5G cooperation across the UK and showcase the real-life impact of 5G in the UK and around the world.

Also in the 5G arena, Huawei established RuralStar base stations to address coverage problems in remote areas. These facilities are being used in more than 50 countries and regions, bringing mobile internet to more than 40 million people living in remote areas.

Huawei’s consumer business also saw robust growth, with 240 million smartphones shipped during the year. The company reported further progress in developing the Seamless AI Life ecosystem across all scenarios and devices, including personal computers, tablets, wearables and smart screens. In 2019, sales revenue from Huawei’s consumer business reached CNY467.3bn ($66.9bn), up 34% year on year.

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“It was an extraordinary year for Huawei,” said Eric Xu, Huawei’s rotating chairman, commenting on the results. “Despite enormous outside pressure, our team forged ahead with a singular focus on creating value for our customers. We worked hard to earn their respect and trust, as well as that of our partners around the globe. Business remains solid.”

Yet despite Xu’s satisfaction with Huawei’s 2019 performance, he cautioned that the company’s external business environment will only get more complicated going forward.

In 2020, Huawei will be facing restrictions on the use of its technology in networks around the world. For example, the UK government decided to place restrictions on the use of technology from the likes of Huawei in the country’s 5G and gigabit-capable networks.

Such suppliers will be excluded from all safety-related and safety-critical networks in UK critical national infrastructure, excluded from security-critical “core” functions, excluded from sensitive geographic locations, and limited to a minority presence of no more than 35% in the periphery of access networks. Similar restrictions have been made by the EU.

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