- Huawei is forecasting a 40% drop in international smartphone sales in 2019 after it was blacklisted in the US.
- The firm’s CEO Ren Zhengfei confirmed the news at an event on Monday after it was first reported by Bloomberg.
- The outlook is so bad that Huawei is considering pulling the Honour 20 phone, which launches in Europe later this month.
- Ren added that he is expecting a revenue hit of around $US25 billion because of the ongoing issues in America.
- Visit Business Insider’s homepage for more stories.
Huawei has confirmed that it is anticipating a giant drop in smartphone sales this year after it was blacklisted by US President Donald Trump’s administration.
Speaking at a livestreamed event at Huawei’s headquarters in Shenzhen on Monday, the company’s founder Ren Zhengfei confirmed a report by Bloomberg that sales of its phones outside of China could plummet 40%.
Citing sales and marketing sources, Bloomberg pegged the drop at between 40% and 60%, which it said would equate to a decline in shipments of between 40 million and 60 million smartphones.Huawei said it shipped 206 million phones last year.
Ren’s guidance was at the lower end of this forecast. “Yes, it dropped by 40%,” he told an audience of journalists and academics following a question from a Washington Post reporter.
The global picture is so bad that Bloomberg reported that Huawei is considering pulling its latest phone launch, the Honour 20. The device launches in the UK and France on June 21, but the firm may halt shipments if demand is low, the report said.
Ren added that he is expecting a revenue hit of around $US25 billion because of the ongoing issues in America. Huawei had forecast earlier this year that it’s total 2019 sales would hit $US125 billion, but the CEO said on Monday that this has now been revised down to around $US100 billion. Huawei’s revenue stood at $US105 billion last year.
The crippled shipping forecast shows the extent of the global anxiety sparked by America’s decision to blacklist Huawei, meaning companies will need express permission to do business with the Chinese firm.
The move – which the US says is because Huawei poses a national security risk because it believes it is a proxy for Chinese surveillance – has forced the hand of some of Huawei’s most critical partners, most notably Google.
The Alphabet-owned company plans to cut off Huawei’s access to the Google version of Android, meaning new users will not have access to things like the Play Store. Although Huawei is preparing its own operating system, Google’s decision could be a big reason why people are choosing to avoid Huawei when buying a new phone.
Support for Huawei in its homeland remains high, however. Huawei founder Ren said sales in China are growing at a pleasing rate, suggesting that this could make up for some of the decline in international sales. “The growth in China is very fast,” he said.
Ren also struck a conciliatory tone at the event on Monday, saying Huawei’s openness to collaboration with the US will “never change” and the firm wants “to serve the American people.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.