Huawei Looks At New Business To Boost Revenues Following US Sanctions

The Chinese telecommunications giant Huawei Technologies Co is looking to venture into less glamorous business alternatives which can eventually help the company to offset the fall in the revenues from its biggest revenue contributor – its smartphone business, after the business was hit by the Trump administration’s sanctions about six months ago.

A fish farm in eastern China that’s twice the size of New York’s Central Park is among the newest customers of the company. Tens of thousands of solar panels in the farm is fitted with inverters from Huawei wherein the panels are used to protect its fish from excessive sunlight while also generating power.

The tech giant has supplied wireless sensors and cameras which has been set deep in the earth in coal-rich Shanxi province of China to monitor oxygen levels and possible malfunctions in machines in mine pits.

On the other side, lidar sensors from Huawei will be used in a new electric car that will be launched at China’s largest auto show next month.

The lucrative business of smartphones for Huawei has been almost obliterated by a series of US sanctions that were imposed on the one time largest smartphone maker of the world.

Even with the change of guard at the White House, the new administration under Joe Biden has kept up the pressure on the Chinese company. That has prompted Huawei’s billionaire founder Ren Zhengfei to direct the company to expand the list of enterprise clients the company’s other business interest areas of transportation, manufacturing, agriculture, etc.

Alongside its cloud services and data analytics solutions business, Huawei is also trying to grow the sale of inverters, of which it is the biggest supplier of the world, to ensure survival of its business which has more than 190,000 employees.

“It’s very unlikely that the U.S. will remove us from the Entity List,” Ren said last month at the opening of a mining innovation laboratory partly sponsored by Huawei. “Right now, we just want to work harder and keep looking for new opportunities to survive.”

The new business ventures that Huawei has moved into could offset the drop in revenues from the its handset business “more or less within this year,” Ren said, even though no specific figures were provided by the company.

In the first six months of 2020, revenue of 256 billion yuan ($39 billion) – accounting for more than half of the total revenues of the company, was generated by the company’s consumer unit. Last year, a “marginal growth” in sales and profit was also reported by the company primarily because of the record orders it got for setting up of 5G base stations as well as strong demand for its smartphones in the forts half of the year.

It has been years that business opportunities in addition to its telecom gear and smartphones business is being explored by Huawei. But with the 42 per cent drop in sale of its smartphones in the final three months of 2020, primarily because of an executive order by the former Trump administration which severed its access to obtain the most advanced semiconductors, made those efforts more urgent.

(Adapted from

Categories: Economy & Finance, Entrepreneurship, Regulations & Legal, Strategy, Sustainability, Uncategorized

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