Bloomberg has an interesting article citing an internal discussion within Chinese technology company Huawei as they estimate the financial impact to the U.S. blacklist position.
Do the math… Huawei estimates an international drop of between 40 million to 60 million units at an average retail cost of $500 per unit. That is a stunning financial forecast for a drop in sales.
(Via Bloomberg) Huawei Technologies Co. is preparing for a 40% to 60% drop in international smartphone shipments as the Trump administration’s blacklisting hammers one of the Chinese tech giant’s most important businesses.
China’s largest technology company is crunching internal estimates and exploring options including pulling the latest model of its marquee overseas label, the Honor 20, people familiar with the matter say.
The device begins selling in parts of Europe June 21 including France and the U.K., but executives are monitoring the launch and may cut off shipments if it sells poorly as expected, they said, asking not to be identified discussing internal matters. Already, two of France’s largest carriers aren’t bothering with the Honor at all, two people familiar with the matter said.
Huawei sales and marketing managers are internally charting a drop in volumes of anywhere between 40 million to 60 million smartphones this year, the people said. That’s a big chunk of an international business that in 2018 accounted for almost half of the 206 million phones it moved.
The unusually wide range underscores the uncertainty gripping Huawei, a Chinese national champion that Washington accuses of aiding Beijing in espionage — something the company has repeatedly denied.
The U.S. in May blacklisted Huawei, choking off the American components and software it needs to run its businesses. That includes updates for the Google Android system that powers all its smartphones abroad. Without that software, devices like the Honor 20 wouldn’t be able to run critical apps like Google Maps and Gmail.
[…] Priced at 399 pounds ($500), the Honor 20 runs on the most advanced Android 9 software and is the latest in a line that’s won over budget-conscious consumers, including in the U.S.
[…] Huawei aims to grab as much as half of the smartphone market in China in 2019 to offset the decline overseas, the people said, citing internal discussions about year-end goals.
While the domestic market is shrinking, Huawei hopes to boost shipments by investing in marketing and expanding distribution channels, one of the people said. (more)
$20 to $30 BILLION loss on Smartphones alone.