Huawei may have to retreat from the smartphone market
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In the worst case scenario where Huawei can’t actually find a way out, it might be forced out of the smartphone market.

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The famous “Mr. Dong” in the tech world Ming-Chi Kuo recently had forecasts about the future of Huawei mobile division. This is also the part that is seriously affected by US sanctions.

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Kuo has considered two scenarios and all are not in a positive direction. But at least the scenario of reducing market share, competitiveness in the international market is still more optimistic than the worst scenario, which is forcing to withdraw from the smartphone market.

With the most optimistic scenario, smartphone selling price is likely to decrease. But with the worst case scenario, Huawei will leave the smartphone market. This will definitely be a good opportunity for competitors like Apple or Samsung and Chinese domestic smartphone firms such as Xiaomi, Oppo, Vivo which have been under Huawei for a long time.

According to DigiTimes, Huawei is planning to reduce smartphone shipments and orders from ODM units amid growing pressure from the US. Most recently, the US has succeeded in cutting off chip supplies to Huawei. After successfully blocking chip supply from TSMC, the US government continued to amend regulations to obstruct Huawei’s supply chain.

Currently, Huawei will not be able to purchase chip products and components using US technology without obtaining a special license. Previously, Huawei was no longer able to access Google’s Android operating system or buy chips from partners like Qualcomm, Intel or services from Microsoft due to the US government ban in May 2019.

As one of the largest smartphone companies in the world today, this will cause the company to lose a majority of market share in the global smartphone market. For Huawei, the Chinese smartphone market is now probably the last resort.

Recently, Huawei had to turn on “survival mode” when racing against time to purchase and store 5G mobile chips, Wi-Fi chips, … from a series of suppliers such as MediaTek, Realtek. , Novatek, … in the context that the company will not be able to buy chips from suppliers without a license after September 14.

Everything is fine for Huawei now, but the future is uncertain

Huawei recently released its first half of 2020 financial statements. In the first 6 months of the year, Huawei achieved revenue of 65.6 billion USD, up 13.6% year-on-year. During the same period, Huawei’s profit reached $ 6.2 billion, up 23.4% year on year. This also means Huawei is making about 35 million USD profit per day in the first half of 2020.

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Huawei’s consumer business got the highest revenue with $ 36.5 billion. Other businesses generated revenues of between $ 5.1 billion and $ 22.8 billion.

So Huawei’s first 6 months of 2020 business results show that the company is doing well despite the US ban. Remember, Huawei does not directly ban Huawei, but only through bans and restrictions on domestic companies and Huawei partners to put pressure on the company. The US has also indirectly put pressure on allies such as Australia and Zealand to ban Huawei 5G equipment.

Despite all the mounting pressure, Huawei seems to be doing well, at least for now. In 2019, the company shipped about 240 million smartphones. In April 2020, Huawei also overturned Samsung’s dominant position in the smartphone market for the first time. In addition, Huawei is also the largest supplier of 5G smartphones in the world.

But what will the future be when Huawei really gets hit with US sanctions?