TMTPost -- - Huawei Technologies Co., Ltd. recorded more stellar growth at top and bottom line in the starting quarter of this year, driven  by strong comeback in the smartphone market.

Credit：Huawei

Huawei’s net income leapt 564.04% year-over-year (YoY) to RMB19.65 billion (US$2.71 billion) in the first quarter, and revenue that quarter rose 36.66% YoY to RMB178.45 billion, according to a regulatory filling on Tuesday. The figures showcased Huawei accelerated growth this year amid ongoing recovery from U.S. sanctions.

Revenue for the year 2023 climbed 9.64% to RMB704.2 billion and net income that year surged more than 144% YoY to RMB87.0 billion, an annual report released late March showed. The annual revenue was still 21% below Huawei’s 2020 peak of RMB891 billion, but delivered the highest growth rate since the Trump administration blacklisted the company in 2019, compared with a merely 0.9% YoY growth during 2022. The profit last year grew at its highest pace since Huawei started reporting comparable figures in 2006, a great improvement from the year 2022, when the company recorded a 68.7% decrease in profit.

Huawei attributed the high profitability to high quality operations and  sales of some businesses. The Shenzhen-based company said its bread-and-butter information and communication technologies (ICT)  infrastructure remains stable, bringing RMB362.0 billion with a 2.3% YoY growth. The consumer business met Huawei’s expectation, the businesses of cloud services and digital power achieve excellent growth, and the intelligent automotive solutions started scale delivery.

According to the annual report, consumers business, which includes smartphones and electric vehicles (EVs), generated RMB251.5 billion with a 17.3% YoY growth, and the cloud services and digital power also posted double-digit growth of 12.91% with yearly sales of RMB55.3 billion. Revenue from the intelligent automotive solutions had a more stellar 128.1% YoY growth, gaining to RMB4.7 billion.

The annuall performance, especially, the consumers business, was partially driven by booming smartphone sales after Huawei surprisingly launched a presale for its flagship smartphone Mate 60 Pro in August without official release. While the company didn’t provide details about technical specifications or whether the phone supports the 5G network, multiple Chinese media outlets said online tests proved Mate 60 Pro can deliver the internet speed of 5G. The smartphone sales maintained momentum in 2024.

Huawei's earnings of the first quarter came days after a Canalys note said Huawei soars to regain lead in Chinese smartphone market in the same quarter. Huawei returned to the top spot after 13 quarters, shipping 11.7 million smartphones and capturing a 17% market share, thanks to an enthusiastic market response to its Mate and nova series Canalyst said. Oppo, next to Huawei, shipped 10.9 million units, driven by its Reno 11 series’ strong performance. Conversely, following a strong fourth quarter last year, Honor, vivo and Apple slowed their sell-ins in the first quarter, Canalyst noted. The global technology market analyst firm estimated Honoe was third with 10.6 million units with a YoY increase of 9%, trailed vivo with 10.3 million units and a YoY decrease of 9%. While Apple, ranked fifth, declined the most among the top five. The iPhone creator delivered 10.0 million units in the first quarter, representing a 25% YoY decrease.

Canalyst said the mainland China smartphone market has finally seen a rebound after two years, with a shipment of 67.7 million units in the quarter ended March. Growth of the Chinese market is still behind the global recovery of 11%, which allowed Huawei to seize market share and reclaim the crown quickly, Canalys senior analyst Toby Zhu commented. “The production and supply shortage of the Mate 60 series improved in the first quarter, propelling it to become the key driver of Huawei's overall growth,” Zhu said. “In addition to the high-end lineup, Huawei released the nova 12 series in December, which features Harmony 4.0, expanding the Kirin chipset to more product lines and successfully boosting performance in the mid-range price band.” The analyst also noted Huawei upgraded in April the P series to Pura 70, featuring an innovative pop-out camera lens, further sparking market interest.

Despite Huawei's strong start, Canalyst maintained the modest recovery forecast for overall Chinese market performance in 2024 growing at 1%. the firm pointed out the talking point within the industry surrounds intensifying competition and innovation moat building. "The Gen AI-capable smartphone presents important opportunities for Chinese vendors to differentiate in the high-end in 2024 to challenge Apple in their home market," said Canalys research analyst Lucas Zhong. "Canalys forecasts Gen AI-capable smartphones will reach 12% of shipments in 2024 in mainland China, ahead of the global average of 9%.”