(Yicai Global) April 3 -- Huawei Technologies’ profit slumped 69 percent last year, mainly because of a fall in income from smart devices and higher spending on research and development, while revenue at the Chinese telecoms giant rose.

Net profit was CNY35.6 billion (USD5.1 billion) in the 12 months ended Dec. 31, versus CNY113.7 billion (USD16.5 billion) the year before, the Shenzhen-based firm said in an earnings report released on March 31. Revenue edged up 0.9 percent to CNY642.3 billion.

Income from smart devices fell 11 percent to CNY214.5 billion, accounting for only 38.2 percent of Huawei’s total revenue in 2022, compared with more than 50 percent in 2021. The company invested CNY161.5 million in R&D, equal to a quarter of its annual revenue. R&D spending has exceeded CNY977.3 billion in the past 10 years.

“A challenging external environment and non-market factors continue to take a toll on Huawei’s operations,” Rotating Chairman Eric Xu said.

Huawei’s smartphone business remains the most impacted by US sanctions, as its market share fell from second place, he noted, adding that the firm can only make fourth-generation smartphones, as its use of fifth-generation chips is still banned by the US Department of Commerce.

“In the midst of this storm, doing everything in our power to maintain business continuity and serve our customers,” Xu said. “We have also gone to great lengths to grow the harvest, generating a steady stream of revenue to sustain our survival and lay the groundwork for future development.”

Huawei’s business continuity efforts started in 2012, when it prepared a plan B, which became known in 2019, Xu said. “We hope none of our products are dependent on a single country or supplier. Ten years has given us time to complete component replacements and board development for delivery and business continuity.”

Huawei developed and replaced 78 software and hardware tools to ensure continuity in its R&D over the past three years.

“In 2023, we will continue to maintain strategic focus and strengthen R&D investment,” Chairman Liang Hua said. “Working with our global partners, we will focus on creating greater value for our customers, partners, and society as we continue to prime the pump for sustainable survival.”

Huawei has six business units: Information and Communication Technology Infrastructure, Consumer Business, Huawei Cloud Computing, Digital Power, Intelligent Automotive Solution, and HiSilicon. Since it was set up in 2019, the smart auto unit has spent USD3 billion on R&D and has team of 7,000 researchers and developers.

But Huawei has no plan to make cars on its own, executives have stressed several times in recent months. Huawei has also prohibited the firms it cooperates with from displaying the Huawei brand on their cars for the next five years, according to Xu.

Editor: Futura Costaglione