Huawei generated USD92.37 billion in revenue, out of which carrier business was USD40.84 billion
In a press conference held to release the annual report, Huawei said 2023 will be the first year that it returns to business as usual with external restrictions still in place. It will be a crucial year for the company, therefore, it needs to actively drive progress, keep inspiring passion across the organization, and further hone capabilities.
In the conference, Huawei released its 2022 Annual Report today. The company reports steady operations throughout 2022, having generated USD92.37 billion in revenue and USD5.12 billion in net profits. Huawei continues to strengthen investment in R&D, with an annual expenditure of USD23.22 billion in 2022, representing 25.1% of the company’s annual revenue and bringing its total R&D expenditure over the past 10 years to more than USD 140.55 billion.
Huawei returns to business as usual with external restrictions still in place. It has been nearly four years since the US imposed restrictions on Huawei on May 16, 2019, but it seems the company has gotten accustomed to these restrictions and have spent the last several years learning how best to respond to them. Huawei 2022 annual report and financial results released today show the company is returning to business as usual prior to the restrictions.
“2023 will be crucial to Huawei’s sustainable survival and development,” Xu noted. “Plum blossoms tend to grow sweeter from a harsh winter’s freeze. Today, Huawei is like a plum blossom. While it’s true that we have considerable pressure ahead of us, we have what it takes to come out the other end – with opportunities to grow, a resilient business portfolio, a unique competitive edge, the enduring trust of our customers and partners, and the courage to invest heavily in R&D. We are confident in our ability to rise above any challenge that comes our way, laying a solid foundation for sustainable survival and development.”
In 2022, Huawei carrier business saw steady growth, and its performance was in line with forecast. In this business, Huawei continued to see stable development in 5G, while other business modules like IT network, Huawei Cloud, services, and software all grew rapidly. Both the China Region and regions outside China created momentum for our business growth. In 2022, revenue from Huawei’s carrier was USD40.84 billion.
Huawei believes that by investing in 5G, carriers can improve their market competitiveness and achieve business success. Multiple industry reports have drawn the same conclusions. Huawei has seen carriers who were frontrunners in the first round of commercial 5G deployment have generally achieved faster revenue growth than the industry average. The reasons behind this are quite simple. 5G networks are very energy-efficient and reduce the cost per bit for carriers. So, by quickly migrating users and traffic to 5G networks, carriers can more easily monetize these services. Carriers can also capitalize on their 5G networks through latency guarantees, better uplink experiences, and other novel services.
Huawei has also been working closely with carriers and industry partners around the world to explore new ways to monetize 5G in the consumer, home, and business markets, and ultimately make 5G more successful.
Huawei says by the end of 2022, 5G had entered a stage of rapid development, with over 1 billion 5G users worldwide. 5G user penetration had exceeded 30% for leading carriers in a number of countries, including China, South Korea, Switzerland, Finland, and Kuwait, and over 30% of mobile traffic came from 5G networks. In addition, more than 40% of the world’s 5G carriers were providing innovative 5G applications. According to the latest 5G city benchmark report by Ookla, which surveyed 40 representative cities across the globe, Huawei has helped build the 5G networks of the top 10 cities ranked by 5G speed. According to the comparisons of 5G performance between the carriers in these 10 cities, Huawei’s 5G network delivered the best experience.
Huawei is working with other industry players to verify 5.5G technologies and promote their commercial deployment. Together, we want to help carriers improve network capabilities and find new drivers of business growth. 5.5G will be deployed at scale by 2025, and it is a key milestone on the way to 6G.
According to Huawei, 5.5G is essentially a 5G technology, but 5.5G is faster and supports higher levels of automation and intelligence. 5.5G will provide a 10-fold improvement in network capabilities, such as speeds, latency, and positioning. In addition, 5.5G will enable more emerging services and scenarios, such as Passive IoT and harmonized communication and sensing, which will create tremendous new opportunities.
From the perspective of standardization and industry development, there is already an initial consensus on 5.5G. Leading carriers are expected to achieve small-scale commercial deployment of 5.5G by 2024 and large-scale deployment by 2025.
Huawei mentioned that the International Telecommunication Union (ITU) is scheduled to complete its vision on 6G in late 2023. We should expect that 6G will become commercially available by 2030.
Present at the event was Sabrina Meng, Huawei’s CFO. She noted, “Despite substantial pressure in 2022, our overall business results were in line with forecast. At the end of 2022, our liability ratio was 58.9% and our net cash balance was USD25.35 billion. In addition, our balance of total assets reached one trillion yuan, largely composed of current assets such as cash, short-term investments, and operating assets. Our financial position remains solid, with strong resilience and flexibility. In 2022, our total R&D represented 25.1% of our total revenue – among the highest in Huawei’s history. In times of pressure, we press on – with confidence.”
