Huawei Technologies announced a sharp drop in revenue due to US sanctions

Well-known Chinese tech company Huawei Technologies posted a significant first-quarter revenue decline as smartphone sales plummeted and the tech company continued to be hit hard by the sanctions. fine of America.

The Shenzhen-based tech company posted a drop in revenue, according to the Wall Street Journal. In November 2020, the company sold its low-cost smartphone division called Honor.

In the first quarter of this year, Huawei’s revenue in the first quarter of 2021 decreased 16.5% year-on-year to 152.2 billion yuan or about $ 23.5 billion, which is Huawei’s second quarter of decline. Previously, Q4 / 2020 revenue decreased by 11.2%.

Despite declining sales, Huawei posted a 3.8 percentage point increase in net profit to 11.1 percent.

According to Huawei executives, 2021 will remain a difficult year as the company faces US sanctions and the Covid-19 pandemic.

Last year, the administration of former President Donald Trump blocked Huawei from doing business with chip companies that had not yet obtained a license from the US, which forced Huawei to produce using existing stockpiles of chips.

Huawei’s smartphone business was hit hardest. After becoming the biggest smartphone maker last year, Huawei’s phone sales declined globally as component supplies dwindled and many consumers turned to products. other brands.

In recent times, US officials have been extremely cautious about Huawei and see it as a potential national security risk because of concerns that Beijing will be able to use Huawei’s system for the purpose. spy. Huawei has repeatedly denied these concerns.

US officials have taken a number of measures to limit Huawei’s access to US parts supplies and pressured allied countries to block Huawei’s access to ultra-fast wireless 5G technology.

To reduce the impact of falling smartphone and some products sales, Huawei has been experimenting with new businesses. For example, at the Shanghai trade show earlier this month, Huawei announced new self-driving car technology. At the same time Huawei also announced a new operating system to compete with Google’s Android.