Huawei bracing for a 40% to 60% drop in international smartphone shipments


Huawei bracing for a 40% to 60% drop in international smartphone shipments

Huawei bracing for a 40% to 60% drop in international smartphone shipments

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Hot off the news of Huawei cancelling a laptop launch and delaying its foldable smartphone, we’re now starting to see hard numbers for just how much the Trump Administration’s export ban may affect the Chinese company’s business. A report from Bloomberg claims to detail Huawei’s internal estimates, saying the company is expecting a 40 to 60 percent drop in international smartphone shipments due to the export ban. Huawei does about half its smartphone business internationally, and with 206 million phones sold in total in 2018, this would work out to about 40 million to 60 million sales lost.

The Bloomberg report also has talk of Huawei pulling its next smartphone launch, the Honor 20, if sales aren’t up to snuff. The phone launches on June 21 in parts of Europe, but the report says “executives are monitoring the launch and may cut off shipments if it sells poorly as expected.” Carriers also need to be considered in this equation, and the report notes that two of the largest carriers in France have already opted out of selling the device.

This morning Huawei sent a response to the report to Ars and other outlets, saying the Honor 20 launch was still on schedule for June 21, and the Honor 20 Pro would be available in overseas markets “soon.”

A 40 to 60 percent drop in smartphone shipments almost seems optimistic. It’s hard to imagine any informed consumer outside of China picking up a Huawei phone with so much uncertainty surrounding the brand. Once the 90-day support window runs out, it’s unclear if customers will have access to security updates and future Android updates or if the Google Play Store and Google apps will continue to work. Huawei must mostly be hoping that uninformed consumers will pick up its smartphones, unaware of all the turmoil the company is going through.

Aftermarket prices have already cratered for Huawei phones, and some trade-in shops are refusing to accept Huawei devices. This perceived drop in value should affect the new prices of Huawei phones, too; if Huawei does manage to sell some devices, it may be at a steep discount.

Even if Huawei does manage to move some units, the company is unable to buy new components from US vendors or from international vendors that are using US technology. A Bloomberg report from last month said Huawei built up a “three-month stockpile” of components ahead of the export ban, so anything the company sells now is dipping into that stockpile. Eventually, Huawei’s hoard of components will dry up, and then the shortages will start.


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