Huawei has put on a brave face following its enrollment on the US Entity List last month, but in truth, the Chinese OEM is facing significant sales decline internationally. According to a report out of Bloomberg, Huawei expects a 40-60% decline in international sales, underselling in the smartphone department by as many as 40-60 million smartphones this year due to the Trump Ban.
As a result, Huawei is looking into the possibility of pulling the Honor 20 off shelves. The upcoming smartphone goes on sale in Britain and France on June 21st, with other countries to get it afterward. If sales are disappointing, Huawei says it may have no choice but to stop selling the smartphone – which means that production would cease to save money.
The Honor 20 wouldn't be the first mobile casualty of the US blacklisting. In fact, Huawei's upcoming Matebook laptop is also delayed indefinitely due to the Trump Ban on Huawei selling its goods and services in the US. The Mate X foldable smartphone that Huawei planned to release this year to take on Samsung's Galaxy Fold has also been delayed this year.
Huawei says it could still release the foldable smartphone because it was already planned prior to the blacklisting, but that the company is choosing not to release it because of Samsung's foldable smartphone flaws. In such a financial decline, companies have little time to concern themselves with further R&D on flaws that cost money they don't have.
Huawei is already seeing shipment decline in Europe in places such as Germany and Spain. A company executive admitted to sales decline in Spain, while a report has cited sales decline in Germany as well. Europe has proven to be one of Huawei's biggest markets, so sales decline there is an indication of just how bad things are everywhere else.
Huawei has never had a large presence in the US, but the company's ambitions involved getting a foothold in the smartphone market here to compete with Samsung and Apple, the two most popular smartphone makers in the world. Samsung stands as the top global smartphone maker, with Huawei having stolen second place from tech giant Apple. The Chinese OEM had its sights set on overtaking Samsung by 2020, but this year's decline in forecasted smartphone shipments makes the goal impossible for this year.
Things took a turn for the worst last month when US President Donald J. Trump added Huawei to the Entity List, forbidding all American companies and those with American patents from doing any business with the Chinese Government-endorsed OEM. The declaration motivated a number of companies to cease business with Huawei, including Intel, Microsoft, ARM, and Qualcomm to cease business with Huawei.
Even American tech giant Google revoked Huawei's Android license, though the revocation won't take effect until August 19th. That leaves Huawei some time to continue using Android and updating its devices, but Huawei's new devices won't see Android Q, Google's upcoming major system update. And newer devices launching with old versions of Android could sit on shelves because consumers won't invest in devices that won't see a single new update post-launch.
Sources say Huawei could see a financial decline of up to $30 billion over the next two years due to the US blacklisting. The company will still make money in the US through ownership of 15% of all 5G patents, but it won't be able to sell its networking and mobile equipment stateside.