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  HOME | Business & Economy (Click here for more)

Huawei Revenue $30 Billion Less Than Forecast, Founder Says

BEIJING – Huawei’s founder and CEO on Monday said the Chinese telecom giant’s revenues will be $30 billion less than expected over the next two years due to the United States ban on its products.

Ren Zhengfei said the turnover from the sales will be $100 billion in 2019 and the year to come, which would mean around 10 percent fall as compared to last year’s figure.

At the beginning of the year, Ren had initially said in an interview that sales targets for 2019 were around $125 billion.

Ren acknowledged recent reports indicating a drop in foreign sales for the Chinese company.

“Yes, they have fallen 40 percent, but the growth of smartphone sales in the Chinese market is very fast,” he said.

In a discussion held at the company’s Shenzhen headquarters, Ren said Huawei would reduce its capacity, although he indicated that “by 2020 we may regain our growth momentum.”

He added that the setbacks faced by the organization “are not caused by companies but by politicians,” in a clear reference to the US government led by President Donald Trump, who believes that the Chinese company was posing threat to America’s national security.

“(The) US government is so determined to take extreme measures against Huawei. These restrictive measures will not stop our way,” he continued.

However, he sounded optimistic about the future prospects of collaborating with US companies, despite the country’s sanctions.

“In the past 30 years, Huawei’s development has been supported by companies around the world,” he said.

He added that they were determined to work with US firms in the past and would remain to be even more determined to do so in the future.

In mid-May, the US placed Huawei on a blacklist for suspected espionage and prohibited the sale of its tech equipment in the US as well as banning it from collaborating with US firms.

It has warned its allies not to accept Huawei’s offers to construct state-of-the-art 5G networks, alleging it would allow the Chinese government “backdoor” access to spy on them.

As a consequence of this, Google announced it would end its Android support for Huawei devices sparking panic for some users who feared they would no longer be eligible for system updates.

Huawei has vehemently denied the accusations.

Despite international allegations on the security of its equipment, Huawei boosted its sales by 25.1 percent in 2018.

The firm is said to have sold 206 million mobile phones and earned around 721 billion yuan ($110 billion) in sales in the year.

The company has reported 52 percent of its sales in China, 28 percent in Europe, the Middle East and Africa and only 6.6 percent in the Americas.

The tensions between Huawei and the US government are set against a backdrop of a wider trade war between the US and China.

Meng Wanzhou, Huawei’s CFO and daughter of the company’s founder, is currently facing a US extradition battle in Canada, where she was detained at the US’ behest in December.

The US government presented in January a pair of federal indictments against Huawei and Meng personally on charges ranging from financial fraud to industrial espionage.

Huawei has, in turn, sued the Canadian government, police and border officials, saying Meng’s right had been violated.

Huawei Technologies Co. Ltd. is the world’s largest maker of telecommunications and China’s flagship enterprise.

Beijing has reacted angrily to the US legal offensive against the company and its executives.


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