Huawei has disclosed that its smartphone sales the outside the shores of China have plummeted by a whooping 40 per cent; and that it is set to prune production following intimidation by US to have the brand blacklisted.
Founder and CEO, Ren Zhengfei announced this at the company’s headquarters in Shenzhen, confirming sketchy earlier reports in the Chinese media that the tech giants have witnessed a depletion in its overseas sales.
Ren said: ‘Yes, (sales) have fallen 40 per cent,’ before a mouthpiece from Huawei detailed further that the gaffer was referring to a 40 per cent plunge from May to June in the wake of the US blacklist threat.
With the company revealing that it shipped a total of 206 million smartphones in 2018- about half in China and half abroad- Huawei was the world’s number two smartphone producer last year- ahead of Apple- and was the largest provider of telecom networking equipment as well.
According to Ren, Huawei plans to cut production by $30 billion over the next two years in order to keep afloat although not specifying which lines of business would be most affected by the cut.
The Chinese multinational company racked in just over $100 billion in revenue in 2018; so a $30 billion reduction would translate to about a 30 per cent of last year’s overall business.
Ren was however positive that the company which he likened to a ‘damaged but still-flying aircraft’ was going to soon get back on track, adding that sales growth in the domestic market remained ‘very fast’.
‘In 2021, we will regain our vitality and (continue to) provide services to human society,’ he said.
Last month, Huawei was added to an ‘entity list’ of companies barred from receiving US-made components without permission from Washington, though the company was granted a 90-day reprieve for now.
The US feels threatened that systems built by Huawei could be used by the Chinese government for surveillance via secret security ‘backdoors’ built into telecom networking equipment.
Huawei has however strongly denied any links to China’s government, saying the United States has never provided proof of its accusations.