Huawei’s quarterly report is out, with solid numbers but a marked slowdown in the pace of progress, and it may face a real test next year.
According to the data, Huawei’s January-September sales revenue was 671.3 billion yuan, up 9.9% year-on-year, with a net profit margin of 8.0%. Huawei said the business operating results for the first three quarters of 2020 were largely in line with expectations.
Yesterday evening, Huawei officially released the Huawei Mate 40 series mobile phone equipped with the “Ultimate Core”, Yu Chengdong called Huawei “the most powerful Huawei Mate in history”.
In the face of the United States continued to increase the pressure, Huawei has maintained steady growth, but in TSMC helplessness off supply chips, once was rumored to sell the news of the glory of the business. Despite the obvious impact of the epidemic, but the growth rate slowed down significantly, the quarterly report still seems to release a different signal.
Many rounds of pressure on performance is still solid hidden mobile phone shipments data
While Huawei said its results were in line with expectations, they were slightly tougher than last year, which included the impact of the epidemic and an external crackdown.
During the same period last year, Huawei reported sales of 610.8 billion yuan, up 24.4% year-on-year, with a net profit margin of 8.7%, including 185 million smartphones shipped, a figure Huawei did not report again this year.
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Under the dual impact of the new crown epidemic and the U.S. ban, the pressure on Huawei’s global supply chain system has skyrocketed, and production and operations are in great difficulty. Just yesterday at the Huawei Mate40 launch, Huawei consumer business CEO Yu Chengdong said: “Huawei is now in a very difficult moment, we are experiencing the third round of the U.S. government’s ban, this ban is extremely unfair, resulting in a difficult situation for us.”
Huawei said it will do its best to find a solution, and in the next phase will make full use of AI, cloud, 5G, computing and other ICT technology capabilities, and continue to unite global partners to unlock 5G network dividends. Yu also said that no matter how difficult the situation is, Huawei is committed to continuing to roll out technological innovation to bring the best technology and innovation to consumers.
In fact, from May 15 last year by the United States included in the “entity list”, to this year’s crackdown on upgrading TSMC cut off supply, to the ban on amendments to cut off the road to purchase directly from other chip makers using U.S. technology, Huawei’s situation is becoming increasingly difficult, the recent market was once rumored Huawei to sell the glory of the business news. But from the performance point of view, Huawei more than a year still maintained solid growth, and once surpassed Samsung to become the world’s top-selling mobile phone maker.
Last year, Huawei achieved an operating income of 858.8 billion yuan, up 19.1% year-on-year, and a net profit of 62.7 billion yuan, up 5.6% year-on-year. In the first half of this year, Huawei achieved sales revenue of 454 billion yuan, up 13.1% year-on-year, with a net profit margin of 9.2%.
The Mate 40 hardcore iPhone 12, the real test in next year
According to IDC, in the first half of this year, Huawei’s market share in China’s $600+ smartphone market was 44.1 percent and Apple’s market share was 44.0 percent, which is comparable between the two.
Just last night, Huawei’s Mate 40 series phones were announced as scheduled, including the Mate 40, Mate 40 Pro, Mate 40 Pro+ and Mate 40 Porsche Design Edition 4 models, starting at €899 ($7,098) overseas and topping out at €2,295 ($18,119).
Before that, Apple had also just released its new iPhone 12 series. Even at a price that’s 2,000 yuan cheaper than the Chinese version, Huawei’s Mate 40 series is still comprehensively pricier than the iPhone 12 series, which starts at 5,499 yuan (for the iPhone 12 mini), and the iPhone 12, iPhone 12 pro, and iPhone 12 pro max start at The top price is RMB 11,899, RMB 6,299, RMB 8,499 and RMB 9,299.
As Huawei’s “out-of-print core” flagship phone, the Huawei Mate 40 series has been attracting attention from the outside world. Yu Chengdong said at the press conference, “The Huawei Mate 40 series is the most powerful Huawei Mate phone to date, and the Kirin 9000 series chip achieves a new level of performance and energy efficiency.”
Long before the Huawei Mate40 was introduced, Huawei had rushed to charter a plane to bring back the last batch of Kirin 9000 series chips from TSMC before the effective date of the U.S. ban, which is September 15. But there are unconfirmed reports that TSMC supplies Huawei’s next-generation 5nm process Kirin chips only about 8 million pieces.
The first thing you need to do is to take a look at the newest version of the iPhone. Platform, offline authorized retail channels open 100 yuan reservation, some users said “out of print” Huawei Mate 40 than Apple is also difficult to grab.
CITIC Securities believes that the domestic version of the Huawei Mate40 series will be released on October 30, combined with historical pricing, domestic pricing is expected to be 20%-30% lower than the euro pricing. Combined with previous Huawei Mate series sales, the Mate 40 series is expected to sell in the tens of millions, taking sanctions into account.
Given that Huawei has reserved a large number of self-developed and outsourced chips before September 15, CITIC expects that it can still support its use in the next 1-2 years, and does not rule out the possibility of winning longer inventory use time for Huawei’s main brand through sub-brand spin-offs and limited shipments of new machines in batches.
Counterpoint Research pointed out that Huawei reached 21% of the global market share in April, after falling to 16% in August, and Samsung’s market share fell to 22%. The market share rose to 22%. Some media predicted that Huawei’s sales in 2021 may fall by 75% year-on-year. Next year may face a real test.
A few days ago a 2020 domestic TMT enterprise R & D investment ranking, Huawei with 131.7 billion yuan of R & D funds again topped the list, far more than Ali, Jingdong and other Internet giants. Some analysts have pointed out that Huawei may reform its mobile phone strategy in the face of unreasonable suppression from escalating layers.
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