Despite being declared an enemy of the United States government last year, Huawei’s revenues have hit unprecedented highs. On April 22, the company reported it had raked in $26.8 billion in Q1 2019. As such, the Chinese tech giant outgrossed its Q1 2018 income by 39 percent.
Notably, this Monday’s announcement marks the first time Huawei has made a quarterly revenue report. Previously, the corporation only revealed its grosses every six months. In late March, the firm revealed it had taken in $100 billion throughout 2018.
The telecom’s financial performance would’ve been impressive under any circumstance. But its revenue growth is downright spectacular considering its persona non-grata status in America.
The US’s Case Against Huawei
The U.S. government has had a dim view of Huawei since at least the mid-2000s. In 2007, the New York Times reported the Central Intelligence Agency had built backdoors into its networks as it viewed the company as a security threat.
The federal government’s negative perception of the conglomerate continued into the next decade and culminated in 2018. That year, the Federal Communications Commission forbade the use of government subsidies to purchase Huawei devices and services. Washington also pressured Best Buy, AT&T, and Verizon to stop doing business with the Chinese firm.
Consequently, U.S. lawmakers have effectively barred it from doing business in the American consumer electronics market
This year, U.S. authorities have taken steps to prevent Huawei from participating in the building of the nation’s 5G networks. Furthermore, American security experts and government officials have publicly made the case that the firm’s links to Beijing make it susceptible to communist manipulation. As a result, Western nations such as Britain are considering banning Huawei from their telecommunications industries.
Despite the American boycott, the Shenzhen-based corporation has flourished internationally. By September 2018, it had become the world’s second-largest smartphone manufacturer. Notably, market leaders Samsung and Apple experienced significant sales downturns during the same timeframe. However, the organization’s remarkable growth may be due to some unsavory business practices.
Last December, Canadian authorities arrested Huawei CFO Meng Wanzhou on behalf of American federal prosecutors. The United States District Court wants Meng extradited to face multiple fraud charges related to Huawei’s possible business dealings with Iran.
Today, the hugely successful tech concern has denied all the U.S.’s allegations.
No Such Thing as Bad Publicity
Washington’s relationship with the Chinese electronics maker is unlikely to improve anytime soon. Earlier this month, the Central Intelligence Agency accused Huawei of being funded by various Sino intelligence groups. However, the conglomerate has not reacted to the agency’s allegations with a lawsuit or a pugnacious press release.
Instead, Huawei has seemingly embraced the notion of living well being the best revenge. For the first time, it abandoned its biannual income reporting to brag about its stellar first-quarter. Furthermore, it forecasted “unprecedented opportunities for growth” as 5G tech is deployed globally.
Ren Zhengfei, the telecom’s founder and CEO, even bragged about his company’s controversial status to CNBC last month. The billionaire executive claimed the U.S.’s ban on Huawei products has served as free advertising that has helped the firm secure larger international contracts. He also boldly stated the organization would increase its annual profits to $250 billion a year by 2024.
If Huawei manages to more than double its revenues despite being banned in the United States, its growth potential will be difficult to estimate.