Huawei Technologies has been experiencing difficulties in recent months: the company's net profit for the three quarters of 2022 decreased by 40% (to $3.8 billion) compared to the same period in 2021. Despite this, the company may completely withdraw from the Russian market, which provided it with part of its existing profits.

Huawei and U.S. sanctions

According to Bloomberg, one of the main reasons for the company's financial problems was the U.S. sanctions, which came into force in 2019 and prohibited the company from selling components, including microchips. Because of these bans, Huawei can not produce processors at the facilities of Taiwan's TSMC and faces some problems.

The company continues to produce smartphones -- but already under the Honor brand, which was spun off into a separate company. In addition, Qualcomm received permission to supply chipsets, which also played an important role.

According to rumors, the company is planning to re-launch its 5G smartphone lineup to circumvent U.S. sanctions and make changes by dropping advanced chips that are subject to sanctions and replacing them with others, such as those made in China.

As for other areas, Huawei is quite active in manufacturing equipment for communication networks and on new projects in the automotive industry.

According to the management, valuable specialists stay with the company. Moreover, the company invests in improving the competitiveness of its products. It managed to increase its net profit by 6% in the third quarter.

Huawei and Russia

Huawei has stopped direct deliveries of smartphones, tablets, TVs, and other equipment to Russia and may finally withdraw from the Russian market, Russian Izvestia media reported citing its sources.

The probable exit from the Russian market is also indicated by the announcement of leasing the Moscow office of Huawei in the business center Krylatskie Hills from February 1, 2023.

Besides, as noted by Telecom Daily CEO Denis Kuskov, Huawei has relocated its employees to Kazakhstan and Uzbekistan, and they are unlikely to return to Russia shortly. The company is not looking for new employees in Russia right now, and this may also indicate its plans to leave the country.

According to various estimates, Huawei Infrastructure now occupies 30 to 40 percent of the Russian market. Moreover, the volume of the Russian market is much larger than that of many European countries. But, cumulatively there are almost 2 times more sales in the European market than in Russia. Probably, the decision to leave the Russian market is dictated by the unwillingness to lose the European market.

If Huawei does leave Russia, it will still be possible to import the company's products into the country through parallel imports, several gray schemes, as well as through distributors who will buy the equipment from intermediaries in China rather than directly from the manufacturer.

The smartphone brand Inoi recently left the Russian market. Previously, the brand was considered Russian, but now it has become Estonian. Flags of Russia and Belarus disappeared from the official website of the company, and the official distributor of smartphones VVP Group removed information about the representative office in Russia and listed contacts of offices in Kazakhstan and Uzbekistan.