Huawei is actively promoting 5G-enabled digital services that can upgrade a range of Chinese industries, from coal mines and ports to hospitals. According to the IEEE Communications Society blog, the US sanctions have taken a toll on the company’s smartphone business, and it has focused its efforts on working closely with the corporate segment, offering infrastructure solutions based on 5G networks.
In the face of external sanctions pressure, the company has formed “legions” – business units designed to help customers digitally transform their products and services in the mining industry, customs, data centers, the creation of smart roads and solar power plants. In total, since last year, the company has created 20 “legions”, the details of which are not yet very many. We are not talking about global expansion in the short term, but it is expected that investments in the digitalization of industrial infrastructure in China will help create a sustainable source of income for the company.
In general, according to the Canalys agency, we are talking about projects that Huawei has been engaged in in one form or another for years. Earlier, high-ranking representatives of the company said that Huawei has left the “crisis mode” and will return to work “as usual” in 2023. However, financial performance in 2022 is almost unchanged from a year earlier. And if in 2018 the company received half of its income outside of China, then in 2021, ⅔ came from China. The consumer segment of the business has suffered heavy losses due to lack of access to advanced semiconductors.
However, the business associated with the supply of telecom equipment is also suffering – largely due to the fact that Chinese mobile operators in general are finishing updating mobile networks. So, in 2021, the company’s revenues in this area fell by 40% compared to 2019, when the implementation of 5G began in China. Therefore, infrastructure corporate projects remained almost the only segment where growth continued – in 2022, revenues grew by 2.1%, although the company still accounts for less than ⅙ of all sales from this business.
The company’s projects in the cloud sector, base stations for industrial enterprises, solutions for the financial industry, and even participation in the electric vehicle industry in cooperation with Chinese automakers are reported. According to Counterpoint Research analysts, Huawei projects in the corporate segment should provide growth within 5-10 years, but one of the most important threats is the possibility of new sanctions from the United States, especially in sectors involving the production of resource-intensive computing devices.
According to some experts, Huawei has been preparing for new sanctions for a long time and in the future it will still be able to close the lack of key technologies by replacing them with local, Chinese ones. The daughter of Huawei founder and CEO Ren Zhengfei, Meng Wanzhou, will take over as rotating chairman from April, according to Chinese media. During his six-month tenure, Meng Wanzhou will chair both the board of directors and the company’s executive committee.
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