The impact Huawei’s blacklisting by the U.S. government will have on its smartphone business has been quite a hot topic for weeks.
According to reports, the impact will be huge, considering Huawei had just overtaken Apple for the number two spot globally, and had only Samsung to catch up with and overtake. However, ever since the speculations, Huawei’s sales have continued to decline and it could be devastating if the US claims continue.
Huawei Technologies Co Ltd’s marketing and sales managers are preparing for a drop in volumes of anywhere between 40 million to 60 million (40% to 60%) in international smartphone shipments this year, Bloomberg reported on Sunday.
To offset overseas decline, Huawei is aiming to grab up to half of China’s smartphone market in 2019, Bloomberg said.
After Bloomberg reported these expected shipment forecasts, Huawei’s CEO and founder Ren Zhengfei told reporters that he expected the company to miss its revenue numbers for 2019 by as much as $30 billion as a result of the U.S. blacklisting. Ren acknowledged that a smartphone sales drop of 40% was an issue for the company.
Ren also said that, Huawei did not expect that the U.S. would attack them with such determination and on such a large scale. Adding that despite preparations, they have have been unable to protect some of the company’s secondary parts.
Huawei continued a flawless decade of growth and broke the $100 billion revenue mark for the first time last year. That growth record has now been brought to an end. The U.S. action will not only wipe out any growth aspirations this year and next, but it will see the fast-growth consumer business decline sharply bringing the overall topline down as well.
According to a report in the Nikkei Asian Review earlier in the month, Huawei had downgraded its forecast for total smartphone shipments in the second half of 2019 by about 20% to 30%. The same report also claimed Huawei had reduced or canceled orders to major suppliers for components that go into its smartphones and telecom equipment. The South China Morning Post also had an unfortunate report that Foxconn had stopped several production lines for Huawei phones as the Shenzhen company reduced orders for new phones.
Huawei, according to Bloomberg, is looking at options that include pulling the latest model of its marquee overseas smartphone, the Honor 20. The Honor 20 will begin selling in parts of Europe, including Britain and France, on June 21 and executives will be monitoring the launch and may cut off shipments if the sales are poor.