Huawei is bracing for the worst
The Chinese tech giant is preparing some truly pessimistic forecasts
Huawei is preparing for the worst. The Chinese tech giant is expecting a significant drop in international smartphone shipments following being put on the “Entity List” by the US government.
Expecting a huge drop
The company is preparing pessimistic internal estimates and is even considering pulling the Honor 20 model (as per sources familiar with the situation), anticipating dismal sales, notably in Europe.
Huawei executives are expecting a drop in sales volume of anywhere between 40 million and 60 million smartphones this year. That’s a large portion of an international business that in 2018 accounted for almost half of the 206 million phones it sold. This wide range highlights the uncertainty the company is facing, a mythical Chinese brand that the current US administration accuses of helping Beijing with espionage.
Morever, Huawei expects its revenues to drop $30 billion below forecast within the next two years, founder and chief executive Ren Zhengfei said on Monday during a panel discussion at the company’s headquarters in Shenzhen.
“We didn’t expect the U.S. to attack Huawei with such intense and determined effort. We are not only banned from providing targeted components but also from joining a lot of international organizations, collaborating with many universities, using anything with American components or even connecting to networks that use American parts,” stated Ren at the panel.
Falling behind Apple?
A few analysts believe Huawei may even fail to stay ahead of Apple in the global smartphone market if it remains isolated from US technology for a while.
If there are “positive developments” for Huawei in the next two months, then it could “possibly” maintain its number two position this year, states Kiranjeet Kaur, an analyst with research firm IDC. “Otherwise, it will be a tough situation for Huawei, which had almost half of its smartphone shipments in overseas markets in 2018 and the first quarter of 2019,” she added.
Huawei has seen better days, that’s for sure. But don’t forget the current “trade war” has just begun, and the situation will continue to evolve.