Chinese tech giant Huawei is now feeling the effect of the U.S. pressure. Huawei founder and CEO Ren Zhengfei said since U.S. President Trump’s order, the telecom company’s overseas sales have fallen. The decline would force Huawei to cut production, the CEO warned.
Trump last month ordered U.S. firms to stop doing business with Huawei due to security concerns. The president claimed that the Shenzhen-based tech giant has ties to the Chinese military. Huawei denied the allegations countless times.
At a panel discussion, Ren confirmed reports stating that his company suffered a 40% decline in overseas sales. A Huawei spokeswoman later clarified that the 40% was from May to June period. Although overseas sales suffered a substantial loss, Ren assured that sales growth in China’s domestic market remained solid.
Huawei proved its dominance last year when it surpassed Apple as the second-largest smartphone maker. In 2018 alone, Huawei said it shipped a total of 206 million smartphones.
To weather the U.S. pressure, Ren said the company would cut production by $30 billion over the next 2 years. Ren still believed Huawei will be back on track soon. “In 2021, we will regain our vitality and (continue to) provide services to human society,” he said.
Last month, Trump also banned U.S. companies from doing business with Huawei. Google then decided it’s cutting its service on the tech giant’s smartphones. Google’s Android operating system powers most of the world’s smartphones. The ban has escalated an already tense trade war between the U.S. and China.
Like the U.S., Japan, Australian, and New Zealand have also banned Huawei’s products within their mobile networks due to security threats.
Huawei Outlook
Global consultancy Eurasia Group last week said Huawei “has little hope of staying on the global cutting edge in either smartphones or networking technology as long as it remains on the US Entity List.”
The analysis further said, “Over time, this will erode Huawei’s ability to offer globally competitive products, and the company will likely be forced to resort to selling second-best products in the domestic Chinese market as it seeks to rebuild its international business without US technology”.
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