Huawei under pressure: a fall in its margin of profit

Huawei, the Chinese company and world leader in telecommunications market, is experiencing a period of great pressure. 

2020 has been and will be a difficult year for many companies around the world, but in particular for Huawei which has been experiencing a drop in revenue growth in the last year. This is due both to the spread of the pandemic and to the restrictions implemented by the US government. 

Indeed, Trump has included the Chinese company in the American blacklist, the “Entity List”; he believes that the company is spying on the United States. With the new restrictions introduced by the United States, components manufactured or developed with software or equipment created in US cannot be sold by foreign companies to Huawei. 

Last year Google interrupted the collaboration with Huawei creating many problems, indeed it is important to remember that the operating system installed on the Chinese company’s smartphones is Android, a system developed by Google. 

The Chinese company, in a statement to the Android Authority, said: “Restricting Huawei from doing business in the US will not make the US more secure or stronger; instead, this will only serve to limit the US to inferior yet more expensive alternatives, leaving the US lagging behind in 5G deployment”. 

During the period January-September the turnover of the Chinese giant ended with 671.3 billion Yuan (100.7 billion dollars). Therefore, there was a fall in its margin of profit which fell to 8%, compared to 8.7% of the last year. 

However, the company has stated that it will try its hardest to find solutions that will allow it to survive and move forward. 

Despite the slowdown of the revenue growth, this year Huawei entered the 100 Best Global Brands 2020, ranking 80th with a value of 6.30 billion dollars.