Huawei’s making tons of money, despite everything

Huawei’s financial results for 2018 are out, and the Chinese tech giant is making a killing. 

The company posted 721.2 billion yuan ($107.4 billion) in revenue — 19.5 percent growth compared to 2017, and the first time the company surpassed the $100 billion yearly revenue mark. Net profit was 59.3 billion yuan ($8.8 billion), a 25.1 percent year-over-year increase. 

And yet, Huawei’s shunned by the U.S., the company CFO remains under house arrest under allegations of fraud, and a British government-led committee just released a scathing report saying the company’s software may be buggy and insecure.

You could recap Huawei’s year like this: The use of Huawei’s 5G equipment by government agencies is banned in the U.S., Australia and New Zealand, and numerous other countries are looking into banning Huawei’s equipment as well, due to spying concerns (which Huawei has vehemently denied). Just yesterday, the British report said that, while Huawei may not be deliberately spying on anyone, the company had poor oversight of its component suppliers and that its software might be buggy (Huawei said it understands the concerns and takes them seriously). Finally, the company CFO Wanzhou Meng, arrested in Canada last December, is still awaiting possible extradition to the U.S., where she is charged for wire fraud and bank fraud. 

But looking at the company’s earnings report, you’d think that Huawei’s never been doing better. The company sold more than 200 million phones in 2018, and ended the year as the third largest smartphone maker by shipments, behind Samsung and Apple, according to Gartner and Canalys (Huawei temporarily overtook Apple to become the global number two smartphone maker in August last year). But Huawei is making more money than ever from phone sales. The company’s consumer business is booming, having grown 45.1 percent year-over-year. Its carrier business — which includes the company’s 5G equipment business — was down slightly (1.3 percent) compared to 2017, but that’s unsurprising given all the negative press and outright bans in some places. 

Just days ago, the company launched a new flagship smartphone, the Huawei P30 Pro, at a lavish event in Paris. Its pricing in Europe is slightly higher than that of its predecessor, the P20 Pro at launch, and the P20 Pro was more expensive than the P10. That’s hardly surprising — with sales booming, Huawei’s able to raise prices of its products, which are now on par with flagship product prices of its nearest competitors, Samsung and Apple. In fact, the Huawei Mate X — a snazzy folding phone which is yet to hit the market — is priced even higher than the upcoming folding phone from Samsung. By some measures, it’s also more promising, as well. 

Here’s the kicker: Despite all the negative press, the company feels it can sustain this growth in the future. According to CNBC, Huawei chairman Guo Ping said the company’s revenue grew 30 percent year-over-year in January and February, and that Huawei expects double-digit growth in 2019. After a year like this, it doesn’t seem impossible.