Huawei presents a pleasant face, but its legs are tottering. The Chinese smartphone champion announced a few days ago the construction of its first factory in Europe. But its sales collapsed at the end of last year in China: the direct consequence of the blows carried by the American administration for several years.
In Alsace, the first factory outside China
It is near Haguenau, about twenty kilometers from Strasbourg, that the first production unit of Huawei mobile equipment outside of China will be built. In the Brumath Business Park, the Chinese manufacturer will invest 200 million euros in an “ecological” site, according to its promoters. From 2023, “wireless base stations” will be released, the technical name for antennas. These will be used to ” all generations of technology, including 3G, 4G and 5G “, According to Linda Han, vice president of public affairs of Huawei, in charge of France.
This new factory, from which around one billion euros of equipment will be produced each year, should generate three hundred direct jobs. Huawei frequently recalls its favorable footprint on the labor market. Present in France since 2003, it employs a thousand people. In Europe, its twenty-three research and development centers employ 13,000 people.
Chinese sales collapse in Q4 2020
This spirit of conquest cannot account for the real state of form of the manufacturer. On Friday 29, the research firm Canalys revealed that sales of Huawei, in China, with just under 19 million units sold in the fourth quarter of 2020, had collapsed, with 22% market share against 38 % one year earlier. Over a full year, sales are down 44%. A fall directly attributable to the US sanctions taken in 2019.
Before deciding on the latter, the United States had consistently identified Huawei as a technological Trojan horse in the service of the Chinese central power. The company, created in 1987, had so far experienced exponential growth, to the point of becoming the leader in research into the fifth generation of mobile telephony, 5G.
Intended to relieve the congested 4G networks, this new generation promises a break in the ways of working and, more generally of living, by connecting objects, public equipment… Raw material of this new break, data, carriers information on users such as their consumption habits, but also, for example, their political opinions …
Cut off the supply
Huawei has always assured that it will not “siphon” this data for the benefit of Beijing. A speech that has never convinced the Trump administration, which is as concerned with transparency as with giving Ericsson and Nokia the means to catch up. She banned US companies from supplying components for Huawei and pressured other suppliers to stop supplying her pet peeve.
Huawei was therefore deprived of Kirin chips, Taiwanese TSMC, as well as the latest versions of Android, Google’s operating system, ultra-dominant in the mobile phone market.
Honor, the Huawei brand sold in November
Chinese consumers have therefore turned away from Huawei, whose once-dominant market share puts it just ahead of two other domestic manufacturers, Oppo and Vivo. In fourth position, the American Apple.
Huawei’s official communication, without minimizing the current difficulties, consists in continuing to galvanize its teams by ensuring that any crisis is the breeding ground for future regeneration. The company is nevertheless forced to give up ground: last November, a sign of its vulnerability, it sold Honor, its entry-level smartphone subsidiary.