Home » Huawei’s mobile phone and 5G business shrinks globally under the impact of the chip ban | Meng Wanzhou returns to China | US restriction order | 5G equipment

Huawei’s mobile phone and 5G business shrinks globally under the impact of the chip ban | Meng Wanzhou returns to China | US restriction order | 5G equipment

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What Meng Wanzhou saw when he returned to China was a Huawei struggling to survive

[Epoch Times October 08, 2021](Epoch Times reporter Wang Xiang compiled a report) Affected by the US chip sales ban, the core business of Huawei, a major telecommunications equipment and telephone manufacturer, has been hit, and overseas markets are also rapidly shrinking. .

The Wall Street Journal reported on Friday (October 7) that when Huawei’s chief financial officer Meng Wanzhou returned to China at the end of September, he saw a very different company-because of the US sanctions, he was forced to shrink his business and at the same time was looking forward to the future. Struggling for survival.

Huawei’s revenue has declined for three consecutive quarters. In terms of smartphone sales, Huawei dropped from the first place in the world to the ninth place, and customers are shrinking in both Europe and China. At the same time, its global telecommunications market share is also declining.

Huawei’s failure in key target markets is related to the US’s efforts to block Huawei’s 5G equipment and customers’ concerns about Huawei’s technological competitiveness.

The United States accused Huawei of stealing trade secrets and violating sanctions, restricting Huawei’s access to high-end chips and software, resulting in a shortage of parts for Huawei’s high-end smartphones or the inability to use applications such as Android. These directly limit consumers’ decision to buy Huawei mobile phones. Chinese mobile phone brand Xiaomi has now replaced Huawei as the number one smartphone manufacturer.

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US officials and congressmen believe that Huawei poses a threat to US national security and worry that the Chinese government may use the private company’s equipment embedded in the global telecommunications network to conduct espionage or disrupt communications.

Huawei denies the US allegations and has strengthened its lobbying and public relations budget in the US in an attempt to get the White House to reconsider the sanctions ban. So far, the Biden administration has not given Huawei a clear way to lift the sanctions.

Huari reported that Biden administration officials said that Meng Wanzhou’s release did not indicate that the United States had loosened its policy on Huawei. Secretary of Commerce Gina Raimondo told the media that her department will continue to work hard to prevent Huawei from acquiring advanced chips.

Huawei predicts that its smartphone revenue loss in 2021 will be as high as 40 billion U.S. dollars. The company relied on China’s domestic market for two-thirds of its revenue last year, and its revenue from China in 2017 only accounted for half of its global revenue.

At the same time, Huawei’s other core business-telecom equipment sales-has also begun to be affected. Huawei said that in the first half of 2021, revenue from the sale of equipment from telecom operators such as base stations and routers fell by 14% from the same period last year to 136.9 billion yuan (approximately US$21 billion).

Although Huawei has begun to try other new business lines, such as: electric vehicles, software pigs, etc., analysts said that the revenue from these new areas is not enough to make up for the losses caused by the sharp decline in smartphone sales.

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According to statistics from the Council on Foreign Relations, a US think tank, in March, Huawei has been excluded from 5G promotion in nine markets, including the United Kingdom, Australia, and Japan, after the United States pointed out the security risks of Chinese telecommunications companies’ networks. Even more countries have imposed restrictions on the company’s technology.

According to data from the Dell’Oro Group, since 2007, Huawei’s telecommunications equipment market share has been increasing every year, but it declined for the first time in the first half of 2021. It now accounts for 29% of the global market share, a drop of 3 percentage points from 2020.

In Malaysia, Huawei has built half of the country’s 4G network. In July, Malaysia’s state-owned telecommunications company Digital Nasional Berhad abandoned Huawei and chose Sweden’s Ericsson AB to build a US$2.6 billion national 5G network.

A person close to Ericsson said that although Malaysian companies chose Ericsson mainly for competitive reasons, Malaysia also expressed concerns about the sustainability of Huawei’s supply chain.

In Mauritius, Vivacom Africa Network Co., Ltd. also abandoned Huawei this year and chose a US-backed supplier to build a network in rural areas in sub-Saharan Africa. Ackim Hamweenda, executive chairman of Vivacom, said he knows Huawei’s reputation for building robust and cheap networks, but he is concerned about the company’s future after Huawei has become a target of US sanctions.

Editor in charge: Ye Ziwei#

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