Huawei Technologies announced on Friday that its net profit for the first six months of the year plummeted by 52%. Total revenue for the period was 301.6 billion yuan ($44.73 billion), a year-on-year decline of 5.9%.
According to the Chinese tech company, the dramatic decline in sales comes as a result of both the rollout of U.S. technology restrictions and weakening consumer demand resulting from tougher economic conditions and a consequential drop in consumer spending. Huawei’s profit margin for the first half of 2022 narrowed to 5% with a net profit of 15.08 billion yuan, a decline from the 31.39 billion yuan earned a year earlier.
Other market conditions that worked against Huawei’s device business include a string of COVID-19 disruptions within China as well as supply chain challenges that crippled smartphone and laptop sales. During the second quarter of 2022, the Chinese smartphone industry fell 14.2% year-on-year to what was its lowest sales volume in a decade.
Despite the company’s decline in its smartphone sales business, Ken Hu, Huawei’s rotating chairman, affirmed that the company’s ICT infrastructure business remained steady, in fact, maintaining its steady growth rate.