Chinese telecommunications giant Huawei has recently reported a notable decline in its net profit for 2024, with a drop of 28% compared to the previous year. Despite this decline, the company’s revenue saw significant growth, increasing by 22% to reach $118.2 billion, driven primarily by sales in consumer goods and automotive-related sectors.
Huawei, headquartered in Shenzhen, attributed the profit decrease to increased investments in future technologies and a lack of gains from the sale of businesses. The company continues to heavily invest in research and development, spending approximately 179.7 billion yuan, which is nearly $25 billion, or over 20% of its total revenue. Notably, more than half of Huawei’s workforce, totaling 113,000 employees, is dedicated to R&D efforts.
The backdrop to Huawei’s current challenges includes rising trade tensions that have limited access to advanced technologies from the U.S. and other countries. The U.S. government has imposed restrictions on American companies, preventing them from doing business with Huawei, which affects the company’s ability to access essential computer chips and software, such as Google services. Furthermore, U.S. authorities have encouraged European allies, including the United Kingdom and Sweden, to limit or ban Huawei equipment in their telecommunications networks, citing security concerns regarding potential espionage and sabotage. These allegations have been firmly denied by Huawei.
Despite these hurdles, Huawei’s consumer division has shown resilience, with a 38.3% increase in revenue last year. The company also reported a substantial growth in its automotive services, and revenues from its cloud computing and digital power segments increased by 8.5% and 24.4%, respectively.
As Huawei navigates these complicated global challenges, it insists that it does not pose a threat to the national security of its customers. The company’s continued focus on innovation and development highlights its commitment to overcoming the current limitations imposed by international relations.
