Asia Huawei overseas smartphone sales down 40 percent, says founder

Huawei overseas smartphone sales down 40 percent, says founder

Huawei a key bone of contention in the wider China-US trade war is a direct victim of a tit-for-tat tariffs war

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The founder of Huawei said Monday that the embattled Chinese telecom giant’s overseas smartphone sales had tumbled by 40 percent this year as it grapples with a US push to clip the company’s wings.

“Yes, (sales) have fallen 40 percent,” Ren Zhengfei said when asked about media reports that it was seeing such a drop.

– Grim outlook –

Huawei has emerged as a key bone of contention in the wider China-US trade war that has seen tit-for-tat tariffs imposed on hundreds of billions of dollars worth of goods.

President Donald Trump’s administration has essentially banned Huawei from the huge US market.

Last month it also added Huawei 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.

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The US fears that systems built by Huawei could be used by China’s government for espionage via secret security “backdoors” built into telecom networking equipment.

Those fears have revolved in large part around Ren’s background as a former Chinese army engineer, and questions over the privately-held Huawei‘s corporate ownership structure, which some critics say is unusual and opaque.

Huawei strongly denies any links to China’s government and says the United States has never provided proof of its accusations.

The Trump administration is pressing other countries to ban Huawei equipment from their networks, particularly in the coming rollout of super-fast 5G networks, a global project in which Huawei had been expected to play a leading role.

The US campaign has already spurred a number of major technology companies, including leading semi-conductor suppliers and brands such as Facebook and Google, to suspend cooperation with Huawei.

In an analysis last week, global consultancy Eurasia Group said Huawei “has little hope of staying on the global cutting edge in either smartphones or networking technology as long as it remains on the US Entity List.”

“Over time, this will erode Huawei‘s ability to offer globally competitive products, and the company will likely be forced to resort to selling second-best products in the domestic Chinese market as it seeks to rebuild its international business without US technology,” it said.

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/AFP

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