news 1 month ago

Huawei is now just struggling to survive

BGR — Andy Meek
  • Huawei phones are still selling well in some parts of the world, but the Chinese technology giant on Friday reported earnings that nonetheless suggest a tough road ahead for the company.
  • Whereas the company, the biggest global tech company based in China, once talked in grand, sweeping terms about its ambitions and strategy, the mantra at Huawei is now simply “survival.”
  • Huawei’s struggle is a result of a Trump administration-led crackdown against the company.

It wasn’t that long ago that Huawei’s billionaire founder and CEO Ren Zhengfei was triumphantly insisting that the Trump administration’s blacklist banning Huawei phones and other components of the company’s business wouldn’t hurt it in the long run. In fact, Zhengfei once insisted that it wouldn’t matter if the company was kept on the blacklist indefinitely — “They may as well keep us there forever, because we’ll be fine without them,” Zhengfei promised in an interview back in mid-November, a little more than a month before the coronavirus outbreak unfolded in China and brought its own set of problems.

Those were the days, back when Huawei was still promising ambitious growth and credibly throwing shade at rival phone makers Samsung and Apple. In early 2019, it got even more assertive, taking out prominent and full-page ad space in mainstream US publications ranging from The Washington Post to The New York Times, The Wall Street Journal and USA Today, as well as Politico and The Los Angeles Times. The ads encouraged readers not to take for granted that “everything you hear” about the company is correct and that “We would like the US public to get to know us better.”

Meanwhile, what a difference a year — along with sanctions, as well as a global pandemic — makes. The mantra these days at Huawei no longer seems to be growth, but “survival” instead. Huawei’s rotating chief executive Guo Ping acknowledged as much during a conference in September, according to CNN, in which he said that the company “is in a difficult situation these days. Nonstop aggression from the US government has put us under significant pressure.

“Right now, survival is the goal.”

On Friday, the company released its latest earnings figures, including that it had generated 671.3 billion yuan ($101 billion) in revenue for the first nine months of 2020. That’s up 10% over the same period last year, but a clear slowdown from the 24% increase in revenue the company reported for the first three quarters of 2019.

“As the world grapples with Covid-19, (the) global supply chain was put under intense pressure and its production and operations saw increasing difficulties,” Huawei said in a statement Friday about its latest earnings, which come in tandem with the release of its latest flagship phone, the Mate 40.

Huawei will, the company’s statement continues, “do its best to find solutions, to survive … and to fulfill its obligations to customers and suppliers.”

Huawei moved up to the top spot this year on the list of companies ranked by the number of smartphones sold, but analysts have speculated that could be because of the way the coronavirus pandemic hasn’t affected all parts of the world or all markets evenly. As things return to normal, the expectation is that Samsung will go back to the lead.

Meantime, Huawei launched the Mate 40 on Thursday. And in remarks related to the launch, the chief executive of Huawei’s consumer business group Richard Yu made the point again that the company is “suffering” from the US-led crackdown and is in an “extremely difficult” place right now.

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