Huawei’s co-founder and Chief Executive Officer Ren Zhengfei has broken the ice about the current situation of the company and admitted that it will suffer as a result of U.S. sanctions. This is the first time that Zhengfei has openly talked about the turmoil his company is in without downplaying the potential effects of the U.S. embargo.
Huawei Once Believed That It Would Overtake Samsung as the Number One Smartphone Brand in 2020
Zhengfei also expects Huawei’s revenue to go down $30 billion below the figure estimated earlier and speculates it to hover around $100 billion in 2019 and 2020. These revelations were made during a panel discussion that was held at the company’s Shenzhen headquarters.
The U.S. has not just restricted Huawei’s access to critical technology such as chip design tools and operating system, it is also trying to persuade its European allies to drop Huawei from the 5G rollout program. As a result, the company is expecting its overseas smartphone shipments to go down by around 60 percent.
However, instead of selling off major assets or laying off employees, the company intends to maintain its research and development budget and bounce back by 2021, after a two-year adjustment period. Previously, the company was hoping to oust Samsung to become the number one smartphone maker during the same time frame but unfortunately, the U.S. had other plans. As far as the sale of Huawei Marine is concerned, the company’s Chief Executive Officer says that the decision was not related to the American blockade.
In the past few years, Huawei has plowed in a lot of money into research and development, which gave it an easy lead over Nordic rivals Ericsson AB and Nokia Oyj when it comes to telecommunication gear. However, Zhengfei believes that the U.S.’ smear campaign would wipe off that lead.
To counter this setback, Huawei is trying to become self-sufficient and reduce its reliance on American technology. The company’s founder says that he wasn’t expecting the damage to be this severe and that although it did make some preparations, it should have done more.
However, Zhengfei has been reported to weather some great storms in the past and most likely is not afraid to do what it takes to save his company. The company has presumably hoarded enough components to keep the business running for some time and maintains that its products do not contain backdoors. It is even willing to sign a no-backdoor agreement so overseas customers and governments can lay rest to any rumors of cyber espionage by the company.
Zhengfei does believe that his company will bounce back strongly, but let us wait and see what strategies the technology giant has set in place for this year and the next.
News Source: The Star