In short: After coming close to overtaking Samsung as the world’s most significant smart device supplier at one point, Huawei is now pertaining to terms with a new reality. With a diminishing supply of chips and no sign of enhancing US-China trade relations, it won’t have the ability to sell almost as many mobile phones this year.
Huawei is stuck between a rock and a difficult location as US sanctions have actually led to a significant reduction in global sales of its smart devices throughout2020 In truth, it’s ended up being so hard for the Chinese business to handle the financial effect, that it not just divested in one of its popular sub-brands, but is now relying on pig farming as a way to soften the fall.
However, the business isn’t quiting on its smart device company, which is still thriving in Asian and European markets. According to a Nikkei report, Huawei has actually told its providers that it expects to offer 60 percent less phones this year, adjusting its orders to reflect that expectation.
Some providers have actually been told by Huawei that its sales target is around 70 to 80 million mobile phones for2021 Compare that with the 189 million phones that the company delivered in 2020 and the 240 million units it delivered in 2019, and you can clearly see that Huawei’s optimism at the start of the US-China trade war is fading in the face of a new truth.
In addition, Huawei will have to dig deep into its staying stockpile of chips that it developed when it still had access to TSMC’s foundry. That is projected to get the business through this year, however will limit much of the business’s phones to 4G connectivity, as it can no longer import 5G modems due to US sanctions.
In the meantime, Huawei is hoping the Biden administration will reverse some of these sanctions, and will continue to invest in its Huawei Mobile Providers while growing its range of AI and cloud services. Earlier this month, Huawei CEO Ren Zhengfei said during the inauguration of Intelligent Mining Innovation Lab in Taiyuan that the company is open to “moving all of our 5G innovations, not simply licensing production to others.
The United States, Australia, United Kingdom, and some nations in Europe are actively getting rid of Huawei’s network devices from their facilities due to security concerns, so it’s not clear if they would even think about the company’s proposition to analyze the underlying innovation under a microscope. On the other hand, making a carbon copy of Android 10 will likely bring in much more sanctions, and Qualcomm is more than pleased to fill out the market gap left by Huawei’s steady decline.