Move affects Huawei’s sales

BEIJING: Founder and chief executive of Huawei Technologies Ren Zhengfei, pictured, said he had not expected such a ferocious US attack on the company and that the move to add the world’s largest telecommunications equipment vendor to a US trade blacklist was expected to wipe out US$30 billion (K101bil) of sales growth.
Acknowledging for the first time the likely impact on Huawei of US action, Ren said that total revenue was now expected to remain stagnant at around the US$100 billion (K330bil) level in 2019 and 2020.
He also said overseas smartphone sales had dropped 40 per cent, without specifying the time period.
“We did not expect that the US would attack us with such determination and on such a large scale,” he said during a panel discussion at the company’s headquarters in Shenzhen.
“We made some preparations, such as for the core business part, but we have been unable to protect some of the secondary parts [of our business.”
Ren was speaking at an open panel discussion titled “A coffee with Ren”, in which the Huawei founder held a wide-ranging talk with two American technologists, George Gilder and Nicholas Negroponte.
Although speaking in a slightly softer tone than his usual direct style, Ren nevertheless remained upbeat about Huawei’s long-term future.
“After all this, we will become even stronger,” he said.
“We are the birds that will never die.”
Huawei in March reported a 19.5 per cent jump in annual revenue to US$107.1 billion (K362bil) in 2018, capping a year in which it came under siege as the US government sought to block use of the company’s 5G gear in mobile networks worldwide.
“Huawei lowering its growth target will have an impact on the overall devices market and ICT industry,” said Cao Zhongxiong, executive director of New Economy studies at Shenzhen-based think tank China Development Institute.
“In the past two years, Huawei has been able to push ahead even though the global smartphone market has been in a downward trend … now the future remains unclear.”
Huawei is currently facing a string of US charges, including that the company stole trade secrets, violated economic sanctions and concealed its Iran business dealings via an unofficial subsidiary. – South China Morning Post