On Monday, Huawei announced a significant increase in its revenue for 2024, driven primarily by its core telecommunications and consumer sectors. The tech giant reported a total revenue of 862.1 billion Chinese yuan (approximately $118.2 billion), marking a remarkable 22.4% year-on-year increase. This revenue figure is the second-highest in Huawei's history, just shy of its record of 891.4 billion yuan achieved in 2020.
However, the company faced a decline in net profit, which dropped to 62.6 billion yuan, reflecting a 28% decrease compared to 2023. Huawei attributed this drop to escalating investments aimed at adapting its business model in response to ongoing U.S. sanctions that have limited its access to essential technologies, particularly semiconductors. In a bid to innovate, Huawei invested 179.7 billion yuan in research and development, representing 20.8% of its total revenue, an increase from 164.7 billion yuan in R&D spending in 2023.
Huawei has been actively diversifying its business interests, particularly in fields such as AI data centers, cloud computing, and automotive technology. The company's revenue growth was significantly bolstered by its two major divisions: ICT infrastructure and consumer electronics, which collectively contribute around 82% of Huawei's total revenue. The ICT infrastructure segment, which encompasses its carrier business, saw a 4.9% year-on-year increase, reaching 369.9 billion yuan. This division remains Huawei's largest revenue generator, benefiting from the large-scale deployment of next-generation 5G networks.
2024 marked the inaugural year for the commercial rollout of advanced 5G networks, referred to as 5.5G or 5G advanced, further propelling Huawei's sales figures.
The rebound in Huawei's consumer business also played a crucial role in its impressive revenue results. The consumer division reported sales of 339 billion yuan, reflecting a significant 38.3% growth and a notable acceleration compared to previous years. Once the largest smartphone manufacturer globally, Huawei's smartphone segment had suffered dramatically due to U.S. sanctions that restricted access to vital chips and Google software. However, a breakthrough in semiconductor technology in China enabled Huawei to regain its footing, launching high-end smartphones that have seen robust domestic sales.
In 2024, Huawei's smartphone shipments in China surged by 37% year-on-year, with its market share increasing to 16% from 12% in 2023, as reported by Canalys. This growth came at the expense of competitors like Apple, which experienced a decline in market share and shipments. Huawei has aggressively rolled out premium smartphones, including the innovative first-ever trifold handset, and is gradually reintroducing devices to international markets.
The launch of HarmonyOS 5 in 2024, Huawei's first iteration of its self-developed mobile operating system that reportedly does not utilize any open-source code from Google Android, also marks a significant milestone. Nevertheless, analysts have cautioned that Huawei's international prospects remain challenging, particularly due to its ongoing limitations with access to Android and advanced chip technologies seen in competitor devices from Apple and Samsung.
In response to the impact of U.S. sanctions, Huawei has been venturing into new business areas, including its digital power division, which focuses on energy infrastructure in sectors such as electric vehicles and renewable energy. This nascent segment reported a revenue increase of 24.4%, reaching 68.7 billion yuan. Furthermore, Huawei's cloud computing revenue experienced an 8.5% year-on-year growth. Notably, Huawei's smallest business segment, Intelligent Automotive Solutions, reported a staggering 474.4% year-on-year increase in revenue, totaling 26.4 billion yuan. This division focuses on developing in-car software and driver assistance systems for various automakers.
As Huawei continues to navigate the complexities of global technology markets, its ambitious strategies and new ventures may redefine its position in the industry and help counterbalance the effects of external pressures.
