Huawei's smartphone shipments could see a 60% drop in 2021 amid U.S. sanctions

What you need to know

• Huawei was reportedly told its suppliers that its smartphone component orders could fall by more than 60% this year.
• The company plans to ship around 80 million smartphones this year.
• Huawei had shipped a total of 189 million smartphones last year.

Huawei has notified its suppliers that it could reduce its component orders by over 60% this year, according to a new report from Nikkei Asia. While it had shipped 189 million smartphones globally last year, it plans to order enough components for only 70 to 80 million phones this year. Some suppliers, however, suggest the number could fall further to around 50 million units. Korean publication The Elec had also claimed in September last year had also claimed that Huawei could lower its smartphone shipment target for 2021 to around 50 million.

The report adds that Huawei's component orders have been limited to those for 4G devices, since it doesn't have permission from the U.S. government to purchase core components for 5G models. While some had hoped that Huawei's situation could improve under the new Biden administration, it doesn't look like that is going to be the case. U.S. Commerce Department secretary nominee Gina Raimondo stated earlier this month that she sees no reason why Huawei and its affiliates should be removed from the department's Entity List.

Despite all the challenges, Huawei isn't ready to give up on its smartphone business anytime soon. While some reports had recently suggested that Huawei was considering a sale of its smartphone business, Huawei CEO Ren Zhengfei dismissed those claims and said that he would "never" consider that option.

The company is set to unveil its next foldable phone in China next week, although it remains unclear if the device will be sold in global markets.