China’s tech giant Huawei is poised to declare a monumental triumph in its upcoming annual results, showcasing that years under the shadow of US sanctions have not only shaped the company’s survival but also stoked its transformation into a resilient technology leader. With innovative strides in software, chips, and smart-driving technology, Huawei appears ready to reclaim its position as a global powerhouse.
Huawei has navigated US sanctions by thriving in unexpected ways and achieving a path back to revenue growth.
From Survival Mode to Revenue Rebound
Huawei is expected to report revenues of 860 billion yuan ($118 billion) for 2024, nearing its 2020 peak of 891 billion yuan. Despite seeing its consumer business revenues halved due to depleted chip stockpiles and trade restrictions, this near-comeback is a testament to the company’s adaptability. Huawei’s 2024 revenue represents a 22% year-on-year increase, marking a significant return to growth despite the challenges posed by US sanctions.
The company’s chairman previewed this revenue rebound in February, signalling that Huawei’s multi-pronged efforts in diverse business verticals have paid off. While the full-year profit report is yet to be released, signs of recovery were evident as Huawei’s nine-month net profits dropped by 13.7%, compared to sharper declines in previous years.
Overcoming the Impact of US Sanctions on Huawei
US sanctions had initially pushed Huawei into what its executives called “survival mode”. Cut off from pivotal US technologies like Google’s Android and advanced semiconductor hardware, Huawei explored new opportunities and doubled down on innovation to reinvent itself.
One standout example is its proprietary operating system, HarmonyOS. Launched during the height of the restrictions, it now powers over a billion devices globally, effectively breaking Huawei’s reliance on Google services. HarmonyOS saw its domestic market share rise to 19% in the fourth quarter of 2024, surpassing Apple’s iOS in China. This growth highlights Huawei’s ability to carve out a strong position in its home market despite global challenges.
Paul Triolo, a partner at DGA-Albright Stonebridge Group, remarked, “The challenges Huawei faced have made Chinese companies across the IT stack more innovative, collaborative, and competitive.”
Huawei’s Expansion Beyond Smartphones
Building Leadership in Smart-Driving Technology
One of Huawei’s biggest pivots post-sanctions involved stepping boldly into the automotive sector. The company became a major provider of advanced autonomous driving (AD) technology and partnered with leading Chinese auto companies, including Dongfeng Motor-backed Seres, Chery, and BAIC.
The Aito-branded electric vehicles (EVs) that Huawei co-developed have become a runaway success, with models like the M7 and M9 featuring Huawei’s advanced driver assistance systems. Huawei has more than tripled sales and now prominently displays their cars in showrooms nationwide.
Developing AI and Advanced Chips
Despite being banned from using American semiconductor technology, Huawei developed its own advanced chips. These chips now rival some of the leading offerings from established companies like Nvidia. By focusing on artificial intelligence applications, Huawei is now integrating AI into products designed for industrial communications and connected devices.
Triolo adds, “Huawei’s quest for an alternative AI stack could see dominance in key markets, even if it faces limitations in Western business ecosystems.”
Innovating Within Domestic Markets
Supporting Smart Infrastructure Projects
Beyond consumer electronics, Huawei has made notable strides in 5G infrastructure, energy storage systems, and smart city initiatives. Projects such as building 5G-enabled mines and supplying data centres with cutting-edge energy systems demonstrate how the company has developed revenue streams independent of its traditional markets.
Capitalising on Software Systems
Huawei’s focus on developing robust software platforms has played a pivotal role in driving its recovery. From HarmonyOS to advanced AI-based solutions, the company has secured its foothold in technology markets where independence from Western frameworks is essential.
Charting Huawei’s International Position
While Huawei’s reliance on domestic markets has grown since the sanctions, it is also carefully rebuilding its global presence. The February 2024 launch of its foldable Mate XT smartphone in Malaysia highlights Huawei’s push to compete for consumers abroad. Its foldable phone not only showcases its hardware advancements but also represents an attempt to capture market share in Southeast Asia, Middle East, and other key regions.
However, without full access to Google’s Android ecosystem, Huawei’s consumer electronics may face challenges in reclaiming their popularity in Western markets. Yet, the company’s strengths in data infrastructure and alternative AI solutions have solidified its position as a serious global tech contender.
Source
Reuters – China’s Huawei returns to revenue peak
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