Huawei’s smartphone shipments could fall by up to a quarter this year, analysts say
- Slump forecast after US commerce department blocked Chinese tech giant from buying US goods last week
- Tech companies including Google and chip designer ARM have said they will cease supplies and updates to Huawei
China’s tech giant Huawei, hit by crippling US sanctions, could see shipments fall by as much as a quarter this year and faces the possibility that its smartphones will disappear from international markets, analysts said.
Smartphone shipments by the world’s second-largest smartphone maker by volume could drop by between 4 and 24 per cent this year if the ban remains, according to Fubon Research and Strategy Analytics.
Several experts said they expected Huawei’s shipments to slide over the next six months but did not give a hard estimate due to uncertainties surrounding the ban.
The ban applies to goods and services with 25 per cent or more of US-originated technology or materials, and may, therefore, affect non-American firms.
Tech companies including Google and chip designer ARM have said they will cease supplies and updates to Huawei.
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“Huawei may be wiped out of the Western European smartphone market next year if it loses access to Google,” said Linda Sui, director of wireless smartphone strategies at Strategy Analytics.
She predicted the company’s handset shipments would decline by a further 23 per cent next year but said the company could survive on the sheer size of the China market.
Fubon Research, which previously forecast Huawei would ship 258 million smartphones in 2019, now expects it to ship just 200 million in a worst-case scenario.
Huawei commands nearly 30 per cent of the European market according to industry tracker IDC, and shipped 208 million phones last year, including half to markets outside China. The company counts Europe as the most important market for its premium smartphones.
Huawei has said it has been developing the technology it needs to be self-sufficient for years, but experts are not buying the claim.
They said key components and intellectual property needed in Huawei’s devices were not available outside the United States.
Huawei would potentially need to lay off thousands of people and “disappear as a global player for some time”, said Stewart Randall, who tracks the chip industry at Shanghai-based consultancy Intralink.
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Potential buyers of Huawei’s phones were likely to switch to high-end devices from Samsung and Apple, and also buy mid-end phones from domestic rivals OPPO and Vivo, analysts said.
“It leaves an amount of share in its wake that can get picked up by competitors, particularly Samsung given its strength in regions like Europe,” said Bryan Ma, who researches the global smartphone market at IDC.
Huawei handsets are already drawing fewer clicks from online shoppers since the United States blacklisted the company, according to PriceSpy, a product comparison site that attracts an average of 14 million visitors per month.
“Over the past four days, Huawei handsets have slumped in popularity – receiving almost half as many clicks as they did last week in the UK and 26 per cent less on the global stage,” PriceSpy said.
The export ban on Huawei could also delay China’s 5G roll-out, Jefferies analyst Edison Lee said. Huawei has said it signed 5G contracts with 40 clients around the world.
