Huawei's growth slowed after Apple's surge in China and intensifying competition in AI chips

On March 31, 2026, Huawei showed that its recovery from the sanctions debacle remains fragile. The company grew again, but growth rates have plummeted sharply, and in the key Chinese market it faces simultaneous obstacles from Apple's return and growing competition in the local AI ecosystem.

Where the business slowed

Huawei's revenue for 2025 reached 880.9 billion yuan, with growth of only 2.2% year-over-year. For comparison, in 2024 the company added 22.4%. Formally, this is the second-best result in Huawei's history after the 2020 peak, but the structure of the numbers looks far less encouraging than the overall headline.

The largest segment, ICT Infrastructure, which includes networks, computing, and AI components, grew by only 2.6%, while the consumer business with smartphones and devices grew by 1.6%.

• Total revenue: 880.9 billion yuan
• Annual growth: 2.2% versus 22.4% a year earlier
• Consumer business: +1.6%
• Cloud business: -3.5%
• Automotive solutions: +72.1%

The cloud business particularly suffered: external cloud revenue declined by 3.5%. Against this backdrop, the most vibrant segment turned out to be intelligent automotive solutions, where Huawei grew by 72.1%. That is, the company still has money, but it is being driven by the wrong directions from the perspective of the AI race that the market is watching.

This is an important signal: despite a huge base and strong brand, Huawei has not yet been able to turn its AI bet into even growth across all major verticals.

Apple returned to China

The second problem for Huawei is the smartphone market in China, where Apple is rising again. According to Counterpoint, in the first quarter of 2026, iPhone shipments in the country grew by 20%, although the overall market declined by 4%. Huawei maintained first place with a 20% share, but Apple came close with 19%.

For Huawei, this is an unpleasant dynamic: even while maintaining leadership, the company is losing room for steady growth in its most profitable segment. Apple's momentum came precisely from iPhone 17. As early as autumn 2025, early sales of the new lineup in the US and China exceeded the previous generation by 14% in the first ten days.

This does not mean that Huawei is losing the market right now, but it means something else: the effect of the company's return after the chip breakthrough and a series of blockbuster releases no longer looks unconditional. The premium buyer in China is again comparing options rather than gravitating toward one brand out of inertia.

AI is no longer enough

Huawei continues to invest in technological independence almost aggressively. In 2025, R&D spending reached 192.3 billion yuan — 21.8% of annual revenue. The company is openly betting on computing, the Ascend ecosystem, HarmonyOS, and its own development tools.

But for now, this technological reserve looks more like an investment in the coming years rather than a working commercial engine. Meng Wanzhou directly stated that Huawei is moving toward a future that is 'full of uncertainty,' and therefore must maintain strategic focus.

"We are moving toward a future full of uncertainty,"

Meng Wanzhou said.

The problem is that China's AI boom no longer works only in Huawei's favor. According to IDC, in 2025 Chinese AI accelerator manufacturers captured about 41% of the domestic server accelerator market, shipping 1.65 million cards. Huawei was the largest local supplier, but is no longer the only center of gravity.

Other players are entering the market more actively, and new capacities and 7-nm processes are being developed not only by Huawei's partners. Even the new 950PR chip, which ByteDance and Alibaba are testing, looks more like a step to maintain position than a guarantee of a new breakthrough.

What this means

Huawei remains one of China's most resilient technology companies, but the March reports showed the limits of its current growth model. A domestic AI boost alone is no longer enough: the company needs to simultaneously contain Apple in smartphones, accelerate Ascend monetization, and prove that its AI ecosystem can grow faster than the broader Chinese market around it. The next stage for Huawei is not just to invest more than everyone else, but to more quickly turn those investments into sales and market share.