Huawei lowers 2019 revenue target by US$30 billion as US ban hurts business
The firm, which reported a revenue of US$104 billion (721.2 billion yuan) last year, is looking at a flat performance for this year and for 2020, at a revenue of around US$100 billion.
The impact of the blacklist from the United States (US) has been harsher-than-expected, said China smartphone maker Huawei’s founder and chief executive Ren Zhengfei, as he cut the revenue expectations for this year.
‘We did not expect that they would attack us on so many aspects,’ Mr Ren said in a panel discussion at the company’s Shenzhen headquarters on Monday, Reuters and the South China Morning Post reported.
‘We cannot get components supply, cannot participate in many international organizations, cannot work closely with many universities, cannot use anything with US components, and cannot even establish connection with networks that use such components,’ Mr Ren said.
The firm, which reported a revenue of US$104 billion (721.2 billion yuan) last year, is looking at a flat performance for this year and for 2020, at a revenue of around US$100 billion. The firm had earlier predicted for a revenue of between US$125 billion and US$130 billion for this year.
The US placed Huawei on a blacklist last month, preventing it from having business activities with US companies. For months the Trump administration has been trying to persuade allies to deny China a role in building the next-generation 5G mobile networks, cautioning that doing so would lead to restrictions on information sharing with America.
In an interview with Bloomberg later in May, the founder of Huawei had said that the firm will find its own way to solve its supply chain problems. ‘We will maintain our existing supply chain and will continue to place orders with US companies. But if they can no longer supply us, the portion of our own in-house products will increase,’ he said.
Huawei’s back-up plan: Its operating system “Hongmeng”
The tech firm is said to have applied to trademark its own operating system called “Hongmeng” in at least nine countries and Europe, data from the United Nations World Intellectual Property Organization showed.
The operating system is a back-up in the event if the Chinese firm is disallowed from US software or from the use of the current operating system in its phones, Alphabet Inc’s Android.
Details on the operating system has yet been revealed. On its application to trademark the system, Huawei plans to use “Hongmeng” for gadgets ranging from smartphones, portable computers, car televisions to robots.
In the first quarter of this year, Huawei’s share of global smartphone shipments rose 15.7%, an increase from the 10.5% rise a year ago, data from research house Gartner showed. Huawei lags slightly behind Samsung who currently helms the largest market share, at 19.2%. US’ Apple is the third-largest vendor globally, at a 11.9% share.
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