What you need to know
- The U.S. ban on the Chinese giant is finally starting to hurt Huawei.
- Despite stellar performance in 2019, the company expects a massive 20% drop in smartphone sales this year.
- The underlying cause? Lower demand in foreign markets due to the lack of Google services on its newest phones.
Despite holding strong for nearly a year since it was first added to the U.S. Entity List, Huawei's fortunes may finally be starting to turn as the Trump administration's maximum pressure campaign starts to yield tangible results.
Even though most of its new phones lacked Google services last year, Huawei was still able to report a 20% year-on-year increase in smartphone sales in 2019, owing to strong domestic demand, as well as its reliance on phones that had already been certified for Google Mobile Services before the U.S. ban went into effect.
2020, however, is going to be a different beast altogether, with The Information (opens in new tab) reporting that the Chinese giant expects sales to drop from 240 million last year back to 2018 levels of around 190-200 million units. Those numbers, shared with the publication via unnamed sources, come from Huawei's internal projections, shared with a select few managers in the company's consumer electronics division.
The driving force behind the flagging sales is the waning appeal of Huawei's smartphones in foreign and European markets due to the lack of Google Mobile Services. And while both Google and Huawei are taking measures to deal with this new reality, it's unclear if any of them will save Huawei from the dire predicament it currently faces.
