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Huawei’s smartphone sales and 5G business stay strong despite US hostility

Huawei says business is still booming despite the US campaign against the Chinese tech company.

The Shenzhen-based company reported Wednesday that it generated 610.8 billion yuan ($86 billion) in revenue during the first nine months of 2019, a 24% increase over the same period last year. The private company did not disclose detailed earnings, but it did say that its net profit margin was 8.7%.

The results are promising news for a company that has come under intense pressure from the United States, which put Huawei on a trade blacklist in May. The move prevented American companies from selling the Chinese firm certain software and components without a license, although some have found ways to do some business with the company.

Huawei smartphones aren’t popular in the United States — no US carriers sell them, though Americans can buy them directly from the company — but its networking technology is used in rural areas of the country.

Washington has alleged that Beijing could use Huawei products to spy on other nations. Huawei denies that its products pose a national security risk.

Huawei is the world’s biggest maker of telecommunications equipment, and has ambitions to become the global leader of next generation wireless technology, or 5G. It was the second biggest smartphone maker in the world at the end of June, according to consultancy Counterpoint Research, and competes with the likes of Samsung and Apple.

The company says its smartphone business has grown “steadily,” adding that it sold more than 185 million phones in the first three quarters of the year — a 26% increase compared to the same period a year ago.

That’s particularly notable because CEO Ren Zhengfei said in June that overseas smartphone sales dropped by 40% in the weeks immediately following the US ban. Ren also said, though, that Huawei’s smartphone sales in China had grown rapidly.

Huawei’s networks business is also proving resilient. The company said Wednesday that it has “sped up” commercial deployment of 5G networks around the world, and has signed more than 60 commercial contracts for 5G with “leading global carriers.”

Germany keeps door open

While Washington has been urging its allies to restrict or ban the use of Huawei equipment in their 5G networks, the company has received promising signals from some governments in recent days.

Germany, for example, has decided against banning Huawei’s 5G components.

“We are not taking a preemptive decision to ban any actor, or any company. Instead we are saying that we have strong security requirements that have to be fulfilled and that will be verified consistently,” Steffen Seibert, a spokesman for Chancellor Angela Merkel, told reporters on Monday.

Huawei said Wednesday that Germany’s decision creates a “level playing field for 5G network vendors.”

“Huawei will continue to work openly with regulators, customers and industry organizations to ensure that mobile networks are secure,” a spokesperson for the company said in a statement.

CNN Business’ Laura He, Sherisse Pham and Anna-Maja Rappard contributed to this report.

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