Huawei fears its mobile business is set for an unprecedented decline in 2020, industry insiders claim. Between the coronavirus pandemic and standing American sanctions, its supply chains have been freakishly crippled for half a year now. And the consequences of that mess are now starting to emerge.
Newly reported projections from Huawei illustrate the precariousness of its circumstances; the technology juggernaut's allegedly expecting a 20% annual decline in smartphone sales, The Information contends.
Morale comes first
Only a small circle of company officials is presently privy to HQ's realistic take on their unenviable situation. Those employees learned of the bleak forecast in January, as per the same source. Huawei's said to be anticipating its annual handset sales to drop to as little as 190 million units in 2020.
The figure is a far cry from Huawei's 2019 performance which saw it post record-breaking growth across the board even as its stateside operations were cut off at their knees. The device maker hence sold 240 million Android smartphones over the said period. The remarkable achievement constituted a 15% year-on-year improvement, largely due to domestic gains driven by a wave of consumer patriotism in China.
But defying the Department of Commerce is hardly a sustainable endeavor, especially when done in such a spectacular fashion. Huawei's unofficial 2020 forecast appears to confirm as much, signaling its days of explosive growth are now coming to an end after nine whole years.
Are Huawei's fears coming true in 2020?
It truly seems like Huawei simply cannot catch a break in recent times. The fact that its leadership is well-aware of the grim reality it's facing is, therefore, hardly surprising.
That's been the case since at least fall, if not August; i.e. the start of its latest clash with the U.S. government. Sure, Huawei maintaned its amicable public rhetorics in the face of crippling U.S. sanctions but that PR strategy is nothing new for China's telecom giant.
Washington's incessant attention has been weighing heavily on the conglomerate for nearly three decades now. And what few of its partners the Trump administration didn't touch – the COVID-19 crisis did. The newest coronavirus scare shut down many Far Eastern factories, threatening Huawei's ability to compensate for overseas slumps.
Across the pond, Huawei's CFO has been under house arrest in Canada since 2018 due to a DOJ extradition request. Her indictment encompasses corporate espionage, financial fraud, racketeering, and multiple criminal conspiracies. The charges also extend to a number of Huawei subsidiaries, with the defense insisting they're nothing more than geopolitically motivated attacks.