Huawei expects smartphone sales to fall by half outside of China
Huawei is considering pulling launch of Honor 20 smartphone from Europe in order to focus on China
Huawei is anticipating a fall in international smartphone shipments this year of between 40 per cent and 60 per cent as a result of the US sanctions imposed in May.
That's according to a weekend report by Bloomberg, citing the usual "people familiar with the matter". It comes as Huawei prepares to launch its £399 Honor 20 smartphone in the UK on Friday this week.
According to Bloomberg, the company is currently assessing its options and may even pull the Honor 20 from overseas markets in order to focus on its core market in China.
While the Honor 20 runs on Huawei's home-grown Kirin system-on-a-chip, fabricated by TSMC, potential buyers may have apprehensions regarding its ability to receive updates for Android.
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Last month, the US government placed Huawei in its "Entity List", barring the company from doing business with US companies without explicit prior approval.
The ban saw a series of US suppliers and suppliers with US links stop working with Huawei, almost overnight. The move was so draconian that even Google withdrew its Android licence, stripping Huawei of the right to pre-load the Play Store, Google Maps and Gmail on all new Android smartphones, and Facebook has removed its app from Huawei devices, too.
The move could also affect the ability of Huawei to push security and other updates to Android users.
Huawei founder Ren Zhengfei nevertheless has publicly remained bullish for the company's prospects. He said that such restrictions "may slow" the company's growth, but "only slightly".
Internally, though, the Bloomberg report indicates that Huawei executives are expecting a sharp fall in smartphone sales volumes of anywhere between 40 million to 60 million units this year. If the ban stays in place, the drop will be even steeper in 2020.
To offset overseas the anticipated sales decline, Huawei is working on a strategy to grab up to 50 per cent of China's smartphone market this year.
Huawei's share in China's smartphone market last year was 34 per cent, according to box counters Canalys, making it the only one of China's top five smartphone makers to report growth.
Despite that, the company needs to secure its position in the market and to ward off competition from upstart brands like Vivo and Oppo, which are trying to attract customers in various segments by continuously refreshing their products.
Huawei's long-term strategy includes developing more of its mobile software and technology, particularly chip technology, to decrease its dependence on US suppliers.
The company is also reportedly developing its own mobile operating system, dubbed 'Hongmeng', and has filed trademark applications in a number of countries to support this move.
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