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Huawei says nine-month revenue up despite US pressure

Blacklist has little impact on smartphone sales as shipments in the first 3 quarters surpass 185m units, up 26%

Shanghai

CHINESE tech giant Huawei said on Wednesday that its revenue for the first nine months of the year grew by almost a quarter despite a US campaign to isolate the company globally.

Huawei's revenues jumped 24.4 per cent on-year to 610.8 billion yuan (S$118 billion) and its profit margin increased 8.7 per cent, it announced.

Huawei, based in the southern Chinese city of Shenzhen, is the world's leading supplier of telecoms networking equipment and the No 2 global smartphone vendor.

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But it has been under pressure this year as US officials lobbied allies worldwide to avoid the company's telecom gear over security concerns, amid a wider trade conflict between the two economic superpowers.

In May, Washington said it would blacklist Huawei from the US market and from buying crucial American components, though it has twice extended the company 90-day reprieves, the latest coming in August.

The United States has expressed concern that Huawei equipment could contain security loopholes that allow China to spy on global communications traffic. The company has repeatedly denied the accusation.

"Huawei has maintained its focus on (information and communications technology) infrastructure and smart devices, and continued to boost the efficiency and quality of its operations," a company statement said.

"This contributed to increased operational and organisational stability and solidified the company's performance in the first three quarters of 2019."

The US blacklist could prevent Huawei from getting hold of key hardware and software including smartphone chips, and exclude it from the Google Android operating system, which equips the vast majority of smartphones in the world, including those of Huawei.

Already, Huawei in August revealed HarmonyOS, its alternative operating system for phones and other smart devices in the event the US sanctions are imposed on the company.

But analysts said that it will be hugely difficult for any new operating system to compete against phones that have Android or its rival, Apple's iOS system.

The Google Play Store available via Android provides access to hundreds of thousands of third-party apps and games as well as films, books and music, and analysts said that without Android, Huawei may find it difficult to find buyers for its phones outside China.

But according to Huawei, there has been little impact on smartphone sales so far this year.

It said shipments in the first three quarters surpassed 185 million units, up 26 per cent year-on-year.

Unlisted Huawei does not provide detailed financial figures, and the announcement made no mention of the US blacklist.

Asked recently about the hit to Huawei's business this year, company founder Ren Zhengfei said he reckoned Washington's sanctions would knock about US$10 billion off revenue.

Last year, the company crossed US$100 billion in annual revenue for the first time. AFP