‘Effectively disappeared’: Huawei’s Australian profits have halved and its phones are hard to find
Financial documents have revealed the extraordinary savaging of the Chinese phone giant that once outsold Apple and Samsung. Here’s what they show about Huawei.
Chinese tech giant Huawei is slipping even further from its former glory in Australia, with its profits more than halved, revenue from customers and telcos decimated, and its research and development budget wiped out.
The company, which once boasted more smartphone sales than Apple and Samsung, now employs just 87 people in Australia, according to documents filed with the Australian Securities and Investments Commission.
The news comes just days after the company was banned from operating 5G networks in Canada, and with experts saying the once powerful firm has “effectively disappeared” from the smartphone market in some countries and would find it hard to return.
The Australian arm of Huawei’s latest financial documents show its gross profits halved from $82.9 million in 2020 to $41.4 million in 2021, and its revenue from customers and carriers fell even more.
With its top model smartphones no longer on sale at mainstream outlets, Huawei made just $32 million from customers, down from $84 million in 2020, and received $71 million from local telcos, down from $216 million.
The company’s assets also more than halved, and its local research and development budget was slashed from $1.6 million to “nil”.
The ASIC filing states the company’s “performance has continued to be affected by the Australian Federal Government’s announcement in 2018 around the 5G rollout”.
Both Huawei and ZTE were banned from supplying equipment to Australia’s 5G networks by then prime minister Malcolm Turnbull due to national security concerns and possible directions “from foreign government(s) that conflict with Australian law”.
Several other countries have introduced similar restrictions on the Chinese company since, including New Zealand, Taiwan, the US, UK and India.
Canada joined them on May 20, banning Huawei and ZTE from its 5G rollout, with Innovation Minister Francois-Philippe Champagne saying the country would “take any actions necessary to safeguard our telecommunications infrastructure”.
Telsyte managing director Foad Fadaghi said the restrictions had seen Huawei “effectively disappear” from the smartphone market in some countries and it was “difficult to see how there would be a way back” without a change in rules.
The company’s smartphones are no longer sold by most Australian carriers or electronics retailers; with limited stock available at small online retailers as well as Big W and Kogan.
“It’s difficult for Huawei to support infrastructure with so few consumer products,” Mr Fadaghi said.
“Clearly they’ve pivoted to a different strategy and one that’s focused more on the domestic Chinese market and other countries that have not banned their products.”
In addition to bans on Huawei’s involvement in 5G equipment, Mr Fadaghi said restrictions on its use of Google’s Android software continued to hurt Huawei’s appeal with potential customers, who don’t want to miss out on features.
“Software is critical for all devices and without the world’s leading provider of email, mapping and other applications in Google, it’s very difficult to operate,” he said.
“If users can’t get those applications, it’s difficult for them to stay on that platform.”
Smaller players including Oppo, Motorola, and Nokia have “stepped up to take Huawei’s place,” he said, as well as Samsung’s budget A Series range of phones.
More Coverage
Originally published as ‘Effectively disappeared’: Huawei’s Australian profits have halved and its phones are hard to find
