Despite U.S. security concerns, Huawei's profits increase by 25% in 2018

While Huawei has been dogged by security concerns by the U.S. and other countries, China's largest tech company posted a 25% increase in annual profit last year.

Huawei released its 2018 annual report Friday morning under the headline of "Bullish growth in the face of adversity." Over the past year, the United States has been vocal about its concern that Huawei's telecom gear, most notably its 5G networking equipment, could be used for espionage by China's government.

The Trump Administration has ratcheted up its opposition to Huawei by urging other countries to ban Huawei from building 5G networks. Earlier this week, a watchdog group in the U.K. admonished Huawei for not living up to a companywide cybersecurity overhaul that it had promised in 2012. 

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Earlier this month, Huawei filed suit against the U.S. government after it took issue with a recently passed law that banned federal agencies from buying Huawei equipment.

Driven by its smartphone sales, Huawei reported a net profit of close to $9 billion in 2018, which was an increase of 25% compared to the previous year. Huawei's revenue for the year increased by almost 20% to 721 billion ($105 billion), which was its fastest growth in two years but short of a projection the company provided in January.

While Huawei's smartphone revenues increased by 45% to 348.9 billion yuan, sales of telecom equipment to carriers fell 1.3% in 2018. Huawei is in a battle with Apple to be the world's second-largest smartphone company behind Samsung.

In its cloud business, Huawei launched 160 cloud services and 140 solutions and worked with its partners to serve customers worldwide with 40 availability zones across 23 regions.

Huawei has invested more than 101 billion yuan, or roughly 14% of its sales, in research and development. As a privately-held company, Huawei isn't obligated to comply with any government reporting rules.

"Cybersecurity and user privacy protection are at the absolute top of our agenda," said Guo Ping, Huawei's rotating chairman, in a prepared statement. "We are confident that the companies that choose to work with Huawei will be the most competitive in the 5G era. And countries that choose to work with Huawei will gain an advantage for the next wave of growth in the digital economy.

"Moving forward, we will do everything we can to shake off outside distractions, improve management, and make progress towards our strategic goals. We will continue to strengthen operational compliance, ensure business continuity and sustainability, and cultivate an open ecosystem where all players collaborate and prosper together."

According to a story by Reuters, Ping told reporters at a press briefing Friday morning that the U.S. government has a "loser's attitude."

"It wants to smear Huawei because it can't compete against Huawei," Ping said. "I hope the U.S. can adjust its attitude."