The horizon keeps getting darker for Huawei’s mobile division. Weakened by US sanctions, which prevent it from working with key American companies in the manufacture of components essential to the operation of its products, the Chinese telecoms giant is said to consider taking a step back in the smartphone market.
According to Reuters information, Huawei is negotiating with a consortium of Chinese companies to sell its P and Mate series, its two high-end brands praised by experts for their sophisticated models with cutting-edge technologies. The manufacturer had already sold its subsidiary Honor last fall for 15 billion dollars to allow it to work again with American companies, like Intel or Google.
Huawei has formally denied this hypothesis, reaffirming its commitment to its mobile business, but the latest signals do not give much cause for optimism. The manufacturer’s sales have plummeted in recent months. World number 2 in 2019, Huawei fell to sixth place in the last quarter.
Smartphone sales in free fall
Trendforce estimates the company will only sell 45 million phones in 2021, up from 170 million last year, a drop of more than 70%. “This is probably the most difficult period for Huawei, which can no longer even fulfill orders in its domestic market” because of US sanctions, said Canalys analyst Nicole Peng, interviewed by AFP .
Since this fall, Huawei can no longer equip its high-end devices with new Kirin chips and the group no longer has the capacity to replace them internally. The American embargo also prevents it from using the licensed version of Android and deprives it of Google applications and the most popular American services such as Facebook, Instagram or WhatsApp, which must now be installed on an alternative platform, designed to haste by Huawei.
The coming to power of Joe Biden should not unduly influence the position of the US administration against Huawei even if the company has a slim hope of seeing the sanctions relaxed.
In this context, Huawei should continue to increase the number of announcements in connected objects to strengthen the company’s ecosystem while its global operating system HarmonyOS, designed to make a wide variety of devices interact beyond smartphones ( TV, household appliances, consumer electronics) is expected in the coming weeks. Asked by RTL, Huawei had not yet responded to our questions at the publication of this article.