US sanctions are hurting Huawei badly but the company is determined to fight back, says official

The US sanctions against Huawei have had a drastic impact on its global business and sharply slowed its revenue growth in 2020. Yet the Chinese tech giant is determined to fight back and rely on other countries for growing its business if the US does not change its policy towards the company.

In a response to a question posed by Dawn during a media roundtable, global vice president of corporate communications at Huawei Karl Song explained that if it weren’t for the US sanctions, the Chinese tech giant could have grown impressively in terms of both revenues and profits.

“The US sanctions have had a very big impact on Huawei’s business. If not for this impact, I think the company’s latest annual report would probably have shown 15pc or 20pc growth – both in terms of revenues and profits,” the official pointed out.

The annual results for 2020 published in March showed that growth at Huawei had slowed, with the Chinese tech giant’s sales revenues going up 3.8 per cent to almost $136.7 billion from a year ago and net profit rising 3.2pc to $9.9bn in spite of the US sanctions that brought about serious operational difficulties for the firm in 2019 and 2020.

Elaborating further, Mr Song said that in the second quarter of 2020 Huawei shipped 55 million high-end smartphones, making it top selling brand in the world, surpassing Samsung.

“We were already under sanctions at this point, and we still managed to temporarily achieve this position as the world’s number one. If not for the sanctions, we could have remained on the top spot for years,” he explained.

Now, the number of high-end smartphones the company is shipping has declined dramatically. But, thanks to the “8” part of our “1+8+N” strategy, which increased by 65pc, the impact on its revenues was not so serious. In fact, the Chinese tech giant saw growth of 3.3pc last year. In the company’s 1+8+N strategy, “1” refers to the smartphones, while “8” includes PC, tablet, TV, audio, glasses, watches, locomotives, and headphones. On the other hand, “N” refers to mobile offices, smart homes, sports and health, audio-visual entertainment, and smart travel products.

“We acknowledge that the US sanctions have had a very big impact and will continue to create difficulties in 2021 and 2022. It’s extremely difficult for us but as a big company we are resilient and we can find some other growth engines,” Mr Song said.

The official said the company is continuing to invest very heavily in R&D to secure Huawei solutions and innovative products that allow it to better serve its customers and to create value for them.

“Huawei has almost 200,000 people working for it. They never give up,” he added.