In the spring everything looked rosy in the Huawei universe: The record year 2018 was celebrated: With more than 200 million smartphones sold, the Chinese company landed just behind Apple. Sales rose for the first time to over 100 billion US dollars, or more precisely to 107.13 billion. This corresponded to a growth of 19.5 percent compared to the previous year.
However, the sector with the highest growth was the business with end customers: it grew by a whopping 45.1 percent. The declared goal was to become the new number 1 in the world market ahead of Samsung and Apple. Great hopes were also placed in the 5G expansion.
Mid-May then the US boycott. The Chinese state-owned enterprise was suspected – not for the first time – of espionage. The result: a trade war between the US and China with an uncertain outcome. Huawei also came under enormous pressure internationally. In Germany, Deutsche Telekom advised its employees not to use Huawei smartphones anymore. In Japan and Great Britain, large network operators pulled the ripcord. Huawei 5G devices are currently excluded from 5G planning. Some online marketplaces saw more than 500 percent increase in trade-ins of Huawei smartphones.
Asian portals report that Huawei will discontinue the delivery and development of laptops for the time being.
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Huawei CEO plays down the situation
Meanwhile, US President Donald Trump announced after the G20 summit in Japan, to mitigate the boycott again. According to the British Financial Times, Trump is scheduled to discuss with senior government security officials over the next few days how to reduce pressure on Huawei, reports Golem.de. Trump wants to allow certain shipments of US companies to the Chinese smartphone manufacturer again.
Huawei founder and CEO Ren Zhengfei responded to this back and forth seemingly relaxed. He told the Financial Times that the statements were “of little importance” to him. They are only “good for American companies”. However, it is already an indication of the seriousness of the situation that Ren Zhengfei ever expressed, he spared so far the public.
He said, “Huawei is still willing to buy products from American companies. However, we do not see any big impact on our current operations. “No wonder – according to the New York Times, US suppliers such as chip makers Intel and Micron are working to circumvent the trade war by shifting production to neutral countries. Rumor has it that US companies also bypass the embargo because they rely on Huawei’s components in ongoing production Cnet.
Ark OS: Own operating system in the drawer
It is also still unclear whether Huawei will be able to use Google’s Android operating system in its mobile devices in the future. Google had announced that it would no longer allow Android updates for Huawei devices, but suspended the ban for a while. So the existing customers with Huawei devices of the last years from the P20 to the current P30 series to get an update on Android Q.
However, Huawei is reportedly having a Plan B should Google take pressure from the Department of Commerce seriously: the company has been working on its own operating system called “Ark OS” (codename: Hongmeng) for some time, along with its own App Store (“App Gallery”). This developer should already have equipped with applications.
Figures from Counterpoint Research show that in the first quarter of this year, the four largest Chinese smartphone manufacturers Huawei, Xiaomi, Oppo and vivo together had 40 percent market share. Collaboration between these companies and their own independent software system would be a serious threat to Google’s Android.
“$ 30 billion loss of revenue over the next two years”
Huawei is currently sending signals to its customers that should sound reassuring: well-known apps would continue to be used, and that also applies generally to Android. The safety of the devices is guaranteed. The manufacturer’s warranty of two years, of course, continues to apply in full. As far as the sayings on the official homepage. So is it still going on?
When soberly considered, it is clear that the stated goal of becoming the number one smart phone manufacturer has moved into the distance. Ren Zhengfei expects his group to lose at least $ 30 billion in revenue over the next two years through the trade war alone.
Nevertheless, Huawei is obviously continuing on his chosen path initially unperturbed. The focus is still on 5G, which shows, for example, in the offer to Apple to supply it with 5G modems for its iPhones.
And in the next few days is not only the decision on the easing of the US boycott, the Chinese are currently bringing in Germany their smartphone Mate 20X 5G (999 euros were once scheduled at MediaMarkt, the device is currently available for 599 euros) on the market. The new Huawei P30 Pro has been reduced at Amazon from 749 euros to less than 600 euros.
A headline (“New equipment yes, price erosion but also”) is definitely worth it, because the groundbreaking 5G standard in this country is still in the starting blocks – but that’s another story.