Huawei says "playing its survival", despite solid results – Les Echos

Huawei would be threatened. In any case, this is what Eric Xu believes, as the rotating president of the group. He assures him: "Survival will be our first priority". Alarmist, he also asserts that "any risk to the smooth running of business must be considered as a matter of life and death".

The reason for this concern: the turnover of the Chinese telecoms giant, blacklisted by the United States, will be lower than expected. The group however expects to release 850 billion yuan in 2019 (109 billion euros), an increase in turnover "of about 18% over a year," said Eric Xu.

"Business remains solid, however, and we are resisting in the face of adversity",

    says the president of the world's number two cellphone for whom 2019 was a difficult year. To explain this drop below projections Eric Xu notably mentions "the concerted efforts of the United States to crush us".

Tensions with the United States

Washington indeed suspects Huawei of potential spying for the benefit of Beijing.

    Donald Trump also banned American companies from selling equipment to the group. The Chinese juggernaut thus finds itself out of access from Google's Android operating system, at the risk of no longer being able to offer very popular applications to its customers.

A context which makes Eric Xu say that the battle with the United States will remain at the center of the group's concerns in 2020. "In 2020 we will remain on the black list of the United States (…) It will be a difficult year for us" , he says. A relaxation of American pressure on Huawei, the world leader in 5G equipment, also seems unlikely in the context of rivalry with China.

Bet on China

The group's strategy to resist already seems thought. "We must increase the diversity of our supply chain, which is essential for our security," said the president of the group in his New Year's message. Kenny Liew, analyst at Fitch Solutions interviewed by AFP Huawei should more
rely on the Chinese market to develop its growth.

The disappearance of the group therefore does not seem to be inevitable. But Eric Xu wants to be very serious. The management greeting message was accompanied by a warning to staff. "We will remove the mediocre leaders more quickly." Almost 10% of the worst performing managers could be affected according to Eric Xu. As for the teams which do not contribute sufficiently to competitiveness, they will be “merged or reduced”.

Categories Tech

Leave a Comment