The trade restrictions by the US on Huawei are showing their effects as according to experts, the sales of Huawei smartphones are set to decline by 40%. President Donald Trump had stated back in May that the sale of key technology and services from US-based firms will not take place without special agreements as far as high-profile Chinese companies are concerned.
The brunt of the hit was taken by Huawei who had its access to the US made chips restricted. That’s not the only front where Huawei was hit; it has also lost the support of Google’s Android OS. The company has been putting up a brave face while it announced plans of developing its own OS and making use of locally manufactures chips.
Ren Zhenfei, Huawei’s founder, stated on Monday that the company is getting ready to face a massive drop in its sales. According to Ren, Huawei is expecting a drop in total sales worth $30 billion over the course of the next two years. Ren said, ‘In the next two years, I think we will reduce our capacity, our revenue will be down by about $30bn dollars compared to forecasts, so our sales revenue due this year and next will be about $100bn.’
He further stated while saying that the restrictions are bad for the US and China both, ‘I think both sides will suffer. No one will win.’ Google executives have also stated that by preventing them from offering Android OS to Huawei, the users of Huawei might be under greater security risks. Ren also spoke about the fact that the company had a long road ahead actually to break itself free from the US relationships. He said, ‘In the next two years, we are going to do a lot of switchover of different product versions that will take time, and that will take time to ramp up, and it will take some time to test whether that works. After that step, we will be stronger.’
Washington is doing its best to make sure that Huawei doesn’t become a part of the new 5G network rollout. As per Washington’s claim, the company is a national security threat and has imposed trade restrictions on it. That’s not all; the US is also pressurizing its allies to keep Huawei out of all deals. Australia and New Zealand have already announced that they won’t be working with Huawei. On the other hand, Huawei has announced that it will be working with the Russian telecom company MTS for developing Russia’s 5G network.
