Chinese telecommunications giant Huawei Technologies Co Ltd (華為) yesterday said that “survival” was its top priority after announcing that last year’s sales were expected to fall short of projections as a result of US sanctions.
The global leader in telecom networking equipment has been effectively banned by Washington from working with US firms on the grounds that it poses a national security threat — an accusation that the Chinese company has consistently denied.
Huawei chairman Eric Xu (徐直軍) said that sales revenue for last year was likely to reach 850 billion yuan (US$122 billion) — up about 18 percent from the prior year.
Although he said that “business remains solid,” the figure was less than a previous forecast of US$125 billion.
In a New Year’s message to employees, Xu said that the US government was in the midst of a “strategic and long-term” campaign against the company that would create a “challenging environment for Huawei to survive and thrive.”
“Survival will be our first priority” this year, said Xu, the current chairman under the company’s rotating leadership scheme.
Huawei would need to “go all out” to build up its mobile services ecosystem — its answer to Google apps and services — to “ensure that we can keep selling our smartphones in overseas markets,” he said.
A bright spot was its smartphone business, posting “robust growth,” with 240 million units shipped last year.
While telecom experts consider Huawei a global leader in 5G equipment — in terms of both technology and price — the company has faced obstacles and suspicion from the US and other countries wary of its close relationship with the Chinese government.
US intelligence chiefs have said flatly that Huawei cannot be trusted and that its equipment is a threat to national security — an accusation the company has dismissed.
Washington has banned US companies from selling equipment to Huawei, locking out the smartphone giant from access to Google’s Android operating system.
Huawei expects to remain on the US’ Export Administration Regulations Entity List this year, Xu said, adding that the world’s No. 2 smartphone maker would not grow as rapidly as it did in the first half of last year.
“It’s going to be a difficult year for us,” he said.
The US move against Huawei has come amid a wider trade war between Washington and Beijing, and analysts have said that a “phase one” reached between the two countries would not help the company.
Fitch Solutions Inc analyst Kenny Liew (劉曄) told reporters that “pressure on Huawei will continue in the foreseeable future, even if US-China trade tensions de-escalate.”
“Continued pressure is also aimed at ratcheting up the pressure on US allies to drop the Chinese supplier from their networks,” Liew said, adding that Huawei would increasingly rely on its domestic market to drive growth.
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