Published: Mon, June 17, 2019
Electronics | By Kelly Massey

Huawei and US Chipmakers (Nearly) Admit Defeat

Huawei and US Chipmakers (Nearly) Admit Defeat

The ban has been eased slightly to allow a temporary general license that lets Huawei purchase US goods.

A month after the Trump administration forbade U.S. firms from doing business with it, Huawei expects overseas sales of its smartphones to plummet.

Huawei's global smartphone shipments will drop 40%, Ren said on Monday, without specifying a period.

Huawei sold more than 200 million smartphones previous year, and a 40 percent drop would represent 88 million; a 40 million drop would "merely" result in an 18 percent drop.

"Over time, this will erode Huawei's ability to offer globally competitive products, and the company will likely be forced to resort to selling second-best products in the domestic Chinese market as it seeks to rebuild its global business without U.S. technology", it said.

Analysts are saying Huawei will need to spend more on worldwide marketing as well as expanding its distribution channels.

But industry insiders have remained sceptical that Chinese chip makers can quickly meet the challenge of supplying Huawei's needs and those of other domestic technology firms.

Speaking at a panel discussion organised by the company at headquarters in the city of Shenzhen in southern China, Ren was asked if he could confirm media reports citing anonymous sources which said its overseas smartphone sales had fallen by up to 40%.

Apple could release more new MacBooks this year
Adding further to the predictions and rumours, the company launch the upcoming models with optional LTE connectivity. But reports have noted that there is a 16-inch model with an all-new design expected to arrive this fall.

He said the company expected revenues of about United States dollars 100 billion annually for the next two years, compared to USD 105 billion in 2018.

Ren said the company would regain its momentum and emerge stronger from the ordeal.

Out of US$70 billion (RM292 billion) that Huawei spent buying components in 2018, some US$11 billion went to United States firms including Qualcomm, Intel and Micron Technology Inc.

Huawei has said its work does not pose any threats and that it is independent from the Chinese government.

In order to mitigate poor worldwide performance, Huawei is set to "grab up to half of China's smartphone market in 2019", Reuters writes. While Ren denies that Huawei would share user data with the Chinese government if ordered to do so, Washington has been trying to convince its allies to exclude Huawei from their upcoming 5G rollout.

"Our president has already said publicly that he would reconsider Huawei if we can make a trade deal".

"Over the past eight years, we were not aggressive seeking IPR royalties to companies that use our IPR, that's because we were busy pursuing our business growth", he said.

In brief: Huawei isn't the only one losing money because of its blacklisting.

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