Telecoms Giant Faces Mounting Trade Tensions
BANGKOK (AP) — Chinese telecoms gear giant Huawei said Monday its net profit fell 28% in 2024 while its revenue surged, as the company invested heavily in advanced technologies.
Revenue Jumps Amid Strong Growth in Consumer Goods and Automotive-Related Sales
Huawei Technologies reported 62.6 billion yuan ($8.6 billion) in net profit last year, down from 87 billion yuan the year before. Its revenue jumped 22% to $118.2 billion, with the strongest growth in its consumer goods and automotive-related sales.
Investment in Research and Development Continues to Soar
The company, based in the southern city of Shenzhen, said the decline in profit was mainly due to two factors: "We continued to increase our future-oriented investment and there were no gains from the sale of businesses." One of China's first global tech brands, Huawei said its spending on research and development amounted to more than a fifth of its revenues.
Spending on R&D was 179.7 billion yuan (nearly $25 billion), with more than half its workforce, or 113,000 people, employed in this area.
Challenges Ahead Amid Mounting Trade Tensions
Constrained by mounting trade tensions, Huawei and other Chinese tech companies are working hard to make up for shrinking access to U.S. and other foreign advanced technology.
Citing national security concerns, the U.S. has banned American companies from doing business with Huawei, cutting off its access to advanced computer chips and software such as Google services for its smartphones. It is not allowed to sell its telecommunications gear to U.S. customers.
Global Response to Security Concerns
The U.S. has also pushed its European allies including Britain and Sweden to ban or restrict Huawei equipment in their phone networks over fears Beijing could use it for cybersnooping or sabotaging critical communications infrastructure — allegations Huawei has denied repeatedly. Japan, Australia, New Zealand, and Canada have taken similar actions.
Huawei Denies Threat to National Security
Huawei denies that it poses any threat to its customers' national security.
Consumer Unit Sees Significant Revenue Jump
The company's consumer unit, which sells smartphones and other devices, reported a 38.3% jump in revenue last year. Automotive services-related sales more than quadrupled. Revenues from Huawei's cloud computing business climbed 8.5%, and its digital power unit logged a 24.4% increase in sales.
Key Statistics
- Huawei Technologies reported 62.6 billion yuan ($8.6 billion) in net profit last year, down from 87 billion yuan the year before.
- The company's revenue jumped 22% to $118.2 billion.
- Spending on R&D was 179.7 billion yuan (nearly $25 billion).
- More than half its workforce, or 113,000 people, are employed in research and development.
This article has been written to provide a detailed analysis of Huawei's financial performance in the face of mounting trade tensions. It highlights the challenges faced by the company as it continues to invest heavily in advanced technologies.