Smartphone manufacturers are likely to be feeling the pressure from Huawei’s resurgent success. The Chinese company’s financial reports suggest that even competitors in different markets may be feeling the heat. In 2023, Huawei’s net profit more than doubled, a remarkable achievement considering the constant trade barriers imposed by the U.S. that the company had to navigate.
Huawei Reports $12 Billion in Profit, the Highest in Five Years (Excluding 2021)
According to Nikkei Asia, Huawei experienced a notable increase in net profit of 87 billion yuan, a feat that had not been seen on its balance sheets in five years. This growth was primarily due to the spin-off of its Honor smartphone division in 2021. Despite facing challenges from export controls imposed by the U.S., Huawei has successfully overcome these obstacles and continued to thrive. Additional reports reveal that the company’s consumer electronics revenue grew by 17.3 percent to 251.5 billion yuan (equivalent to $38.69 billion) in the previous year, and there are no signs of this momentum slowing down.
Despite its trillion-dollar status, Apple has had to resort to business tactics like offering discounts on a range of products in order to gain traction in China. However, these efforts have not been successful as reports claim the company experienced a significant decline in shipments, with a double-digit percentage drop. According to Canalys analyst Runar Bjorhovde, this can be attributed to Huawei’s resurgence. As a result, Apple has had to increase its investments in China, with CEO Tim Cook recently making a trip to the country and emphasizing the importance of the supply chain in the region to the company.
“Apple is feeling the heat most acutely from Huawei’s resurgence. Lately, Apple has responded with increased investments into China, including significant spending on co-marketing campaigns, a new Apple store, and CEO Tim Cook’s visit, all initiatives to help it solidify its position in the market.”
In 2023, the company’s revenue increased by 9.6 percent to 704.2 billion yuan ($108.32 billion), surpassing the previous year’s revenue of 642.33 billion yuan ($98.74 billion). Furthermore, its investment in R&D reached an all-time high of 164.7 billion yuan, equivalent to 23 percent of its annual revenue. Building on its success in the previous year, Huawei has set ambitious goals for 2024, aiming to ship 100 million smartphones and potentially introducing its first 5nm chipset in collaboration with its foundry partner SMIC later this year.
According to Nikkei, despite facing a crackdown from the United States, Huawei announced that its net profit has doubled by 2023.
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