Huawei’s smartphone business to decline €35bn by year end

Company's rotating chairman 'hopeful' the company can survive next five years

Trade

Eric Xu, Huawei

Huawei could potentially see revenue from its smartphone business drop by almost €35 billion this year as the company continues to struggle with US trade restrictions.

Speaking at a press conference in Beijing on Friday, the firm’s rotating chairman, Eric Xu (pictured), said disappointing smartphone sales could not be offset by other business areas and suggested the firm will struggle to continue, according to Reuters.

Huawei has brought in just €42 billion from the first half of 2021, according to its earnings report, which is roughly the amount its rotating chairman predicts it will lose by the end of the year. Xu is also reported to have said his “biggest hope” is that the company will still exist in five to 10 years.

US trade sanctions placed upon the Chinese firm under then US president Donald Trump’s administration have hit its smartphone business the hardest; the company has already been forced to sell off its Honor brand and is now denying reports it plans to do the same with its P and Mate brands, following poor sales.

The sanctions meant Huawei is no longer able to license the full version of Android, which includes Google Play Services and popular apps like Netflix and WhatsApp, on its smartphones, effectively derailing its expansion into the European market.

Huawei’s sales have flagged in the region as a result, despite an innovative number of handset launches. The company has tried to adopt an alternative operating system – HarmonyOS – and worked to build out a suitable app ecosystem, but these efforts have done little to help Huawei regain ground.

Even with Trump’s presidency at an end, Huawei and the US continue to endure a fractured relationship. On Thursday, US commerce secretary, Gina Raimondo, said that Joe Biden’s administration would take further action against the Chinese firm “if necessary”.

The comments were in response to calls for even tougher action against Huawei, which is still seen as a national security threat due to alleged ties to the Chinese government.

Ⓒ Future Publishing

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