Huawei's growth stalls as Apple rebounds in China and AI chip competition intensifies

On March 31, 2026, Huawei showed that its recovery from the sanctions slump remains fragile. The company grew again, but the pace slowed sharply, and in its key Chinese market it is being squeezed both by Apple's comeback and by growing competition in the local AI ecosystem.

Where the business slowed

Huawei's 2025 revenue came to 880.9 billion yuan, up 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 breakdown looks far less upbeat than the headline figure. The largest segment, ICT Infrastructure, which covers networking, computing and AI components, grew only 2.6%, while the consumer business, with smartphones and devices, grew 1.6%.

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

The cloud slipped especially noticeably: revenue from the external cloud business fell 3.5%. Against that backdrop, the liveliest segment was intelligent automotive solutions, where Huawei grew 72.1%. In other words, the money is still there, but it is being pulled forward by businesses other than those the market watches in the AI race. That is an important signal: even with a huge base and a strong brand, Huawei has so far been unable to turn its AI bet into even growth across all its main verticals.

Apple is back in China

Huawei's second problem is the Chinese smartphone market, where Apple is climbing again. According to Counterpoint, iPhone shipments in the country rose 20% in the first quarter of 2026, even as the overall market fell 4%. Huawei kept first place with a 20% share, but Apple closed in with 19%. For Huawei this is an unwelcome trend: even while holding the lead, the company is losing room for comfortable growth in its most profitable segment.

The iPhone 17 gave Apple its momentum. Back in autumn 2025, early sales of the new lineup in the US and China ran 14% ahead of the previous generation over the first ten days. This does not mean Huawei is losing the market right now, but it does mean something else: the effect of the company's comeback after its chip breakthrough and a string of high-profile launches no longer looks unconditional. Premium buyers in China are comparing options again rather than defaulting to one brand out of inertia.

AI is no longer enough

Huawei continues to invest in technological independence almost aggressively. In 2025, research and development spending reached 192.3 billion yuan, or 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 than a commercial flywheel that is already spinning.

Meng Wanzhou said plainly that Huawei is heading into a future that is "full of uncertainty," and must therefore keep its 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 makers of AI accelerators took about 41% of the domestic server accelerator market, shipping 1.65 million cards. Huawei was the largest local supplier, but no longer the only center of gravity. Other players are entering the market more actively, and new capacity and 7nm processes are being brought up by more than just Huawei's partners. Even the new 950PR chip, which ByteDance and Alibaba are testing, looks more like a step toward holding its position than a guarantee of a new leap.

What this means

Huawei remains one of China's most resilient tech companies, but the March report showed the limit of its current growth model. National AI momentum alone is no longer enough: the company has to hold off Apple in smartphones, speed up Ascend monetization, and prove that its AI ecosystem can grow faster than the entire Chinese market around it. Huawei's next stage is not simply to invest more than anyone else, but to turn those investments into sales and market share faster.