Huawei CEO underestimated the impact of the ban, says Huawei might see a revenue drop
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Huawei is having a hard time combating with the US government and the whole world. Huawei has been on shaky grounds ever since the US government issued an order banning Huawei from doing business with the US-based companies.
However, Huawei’s CEO had been confident that the ban won’t hurt Huawei too much and the company will be able to function without hardware and software from companies like ARM and Google. Unfortunately, Huawei’s CEO has was wrong and the company finally admitted that they underestimated the impact of the ban.
We cannot get components supply, cannot participate in many international organizations, cannot work closely with many universities, cannot use anything with U.S. components, and cannot even establish connection with networks that use such components.
– Ren Zhengfei, Founder, Huawei
Recently Bloomberg (via Reuters, Business Insider) published a report which estimated a 40% plunge in the sales of Huawei’s smartphones outside of China. Today, addressing via live web conference, Huawei’s CEO confirmed the report. Bloomberg also reported that Huawei is considering to pull out of the Honor 20 launch in UK and France on June 21.
Ren also confirmed that the company is revising its revenue target which was set to $125 billion earlier this year. Huawei has now set its target to $100 billion which is $5 billion less than last year’s revenue. Huawei is currently expected to a loss in revenue of around $25 billion if the ongoing issues with the US government are not solved.
Critics, on the other hand, are sceptical about the move to ban Huawei altogether. Negroponte, founder of the Massachusetts Institute of Technology Media Lab said the government’s move to ban Huawei was a mistake.
Our president has already said publicly that he would reconsider Huawei if we can make a trade deal. So clearly that is not about national security. It is about something else.
– Negroponte
Unfortunately, as things stand, Huawei is facing a big problem on all fronts and the only way they can get out is to negotiate.
