Huawei blames Q1 revenue drop on Honor sale
Rotating chairman Eruc Xu described 2021 as “another challenging year” for Huawei


Huawei reported a 16.5% drop in revenue for the first quarter of 2021, which the company claims is a result of it selling its Honor smartphone business late last year.
Honor was sold in November 2020 to Shenzhen Zhixin New Information Technology, an enterprise owned by the government of Shenzhen. At the time, the company said the decision was due to a shortage of technical equipment caused by the trade restrictions imposed by the Trump administration.
Honor was a substantial contributor to the company’s consumer business revenue, and its sale has now resulted in a 16.5% decrease in year-on-year revenue for the first quarter of 2021, according to Huawei.
However, the company managed to generate an income of $600 million (£432.5 million) in patent royalties and reported net profit margin growth of 3.8 percentage points, to 11.1% year-on-year.
Commenting on the Q1 financial results, Huawei's rotating chairman Eric Xu described 2021 as “another challenging year” for Huawei.
“But it's also the year that our future development strategy will begin to take shape," he added.
RELATED RESOURCE
Despite Xu's high hopes for the future of Huawei, the news comes less than a day before Samsung is expected to announce its earnings. The results are highly anticipated because, according to CCS Insight senior analyst Fiona Vanier, the Korean tech giant has likely grabbed market share from Huawei.
Sign up today and you will receive a free copy of our Future Focus 2025 report - the leading guidance on AI, cybersecurity and other IT challenges as per 700+ senior executives
Vanier said that Samsung’s boost can be attributed to “aggressively targeting existing Huawei smartphone owners looking to upgrade”. She also described Huawei as having “effectively been excluded from the market outside China”.
The news comes just days after it was reported that Huawei was launching six new cloud products in a bid to take on the likes of Alibaba, Amazon, and Google. The newly-announced cloud products, which include containers, artificial intelligence (AI) programming assistants, databases, computing services and infrastructure software, were revealed at the company's three-day developer conference in Shenzhen, which had cloud, AI and open source as its main theme. Huawei also announced a $200 million investment in its developer programme, which aims to boost its software ecosystem and cloud services.
According to Canalys Research, Huawei's cloud efforts have paid off, with revenues jumping 168% year on year in 2020. However, the firm is still far behind the likes of Amazon and Alibaba in China. Huawei Cloud is currently the second-largest player in China with a 17.4% market share, compared to Alibaba's 40%.
Having only graduated from City University in 2019, Sabina has already demonstrated her abilities as a keen writer and effective journalist. Currently a content writer for Drapers, Sabina spent a number of years writing for ITPro, specialising in networking and telecommunications, as well as charting the efforts of technology companies to improve their inclusion and diversity strategies, a topic close to her heart.
Sabina has also held a number of editorial roles at Harper's Bazaar, Cube Collective, and HighClouds.
-
The race is on for Higher Ed to adapt: Equity in hyflex learning
Hyflex courses can improve student wellbeing and engagement, but only with meeting technology that leaves no one behind
-
Gen Z workers are keen on AI in the workplace – but they’re still skeptical about the hype
News Younger workers could lead the shift to AI, but only think it can can manage some tasks
-
Intel makes high-level hires while factory workers are warned of layoffs
News The company is appointing four senior executives as part of efforts to refocus on engineering and customer relationships
-
UiPath names Simon Pettit as new AVP for UK and Ireland
News The seasoned leader will spearhead region-specific transformation projects as UiPath looks to drive operational growth and customer engagement
-
How to empower employees to accelerate emissions reduction
in depth With ICT accounting for as much as 3% of global carbon emissions, the same as aviation, the industry needs to increase emissions reduction
-
Worldwide IT spending to grow 4.3% in 2023, with no significant AI impact
News Spending patterns have changed as companies take an inward focus
-
Report: Female tech workers disproportionately affected by industry layoffs
News Layoffs continue to strike companies throughout the tech industry, with data showing females in both the UK and US are bearing the brunt of them more so than males
-
How can small businesses cope with inflation?
Tutorial With high inflation increasing the cost of doing business, how can small businesses weather the storm?
-
How to deal with inflation while undergoing digital transformation
In-depth How can organizations stave off inflation while attempting to grow by digitally transforming their businesses?
-
How businesses can use technology to fight inflation
TUTORIAL While technology can’t provide all the answers to fight rising inflation, it can help ease the pain on businesses in the long term