F-22Raptor
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Huawei has ”downgraded its forecast for total smartphone shipments in the second half of 2019 by about 20% to 30% from the previous estimate,” according to a report in the Nikkei Asian Review that cited “a source familiar with Huawei smartphone orders.” The company has also “reduced or canceled orders to major suppliers for components that go into its smartphones and telecom equipment,” according to the report. Some of the supply chain reductions “included cuts to orders of as much as 30%.”
This does not come as a surprise given that it is increasingly evident that the U.S. blacklist on Huawei’s supply chain is hitting much harder and faster than anyone expected. There have been many reports in recent days on the “softening” of Huawei’s smartphone market, which is a faster moving barometer than the larger, slower 5G equipment sales market. In a statement, though, Huawei told the Nikkei Asian Review that “its production levels remain normal,” and “sources close to the company downplayed the significance of the adjustments to its components orders.”
Huawei held onto its number two spot for global smartphone sales in the first quarter of 2019 but is expected to struggle to hold off Apple, let alone make up ground on Samsung, through the remainder of the year. The company is in the midst of launch plans for its new Hongmeng OS, an alternative to Google’s Android OS which will be withheld from the company’s future smartphones under the U.S. blacklisting.
There was speculation a week ago that a number of Huawei smartphone production lines had been cut as demand dropped. The South China Morning Post first reported that Foxconn “has stopped several production lines for Huawei phones in recent days as the Shenzhen company reduced orders for new phones.” There was no immediate response from Huawei, but three days later the company flatly denied those reports. An official spokesperson told me that “Huawei refutes these claims, our global production levels are normal, with no notable adjustments in either direction.”
Now, this latest report from Asia appears to point to back to the original report; I have reached out to the same Huawei official spokesperson for comment.
Huawei also held onto the top spot for telecoms equipment sales in the first quarter of the year, according to IHS. Again, the impact on sales through the balance of the year will be watched very closely.
Just as Samsung and Apple benefit from a drop in Huawei smartphone sales, it is Nokia and Ericsson that will be the major beneficiaries of any drop in demand for Huawei telecoms equipment. Although it won’t be clear cut. Russia has just announced that Huawei will work with the country’s MTS carrier to develop its 5G network over the coming year. Huawei described this as “good news,” an understatement under the circumstances.
It was always inevitable that in the fickle consumer market there would be a softening in demand for Huawei devices, if for no other reason than consumer uncertainty—rightly or wrongly—around Android upgrades and support. The hope for Huawei is that the launch of a new OS to settle nerves, allied with a major PR offensive, can keep any downturn as short-term as possible.
For as long as the U.S. blacklist makes headlines, though, and the media runs supply and demand stories, that will be difficult for the Shenzhen manufacturer to pull off. Unlike with equipment sales, there’s nobody on the other side of the deal “to approach to settle nerves.” And that was always the risk of shifting the company from steady equipment sales to the consumer market.
In the meantime, PR efforts continue to crank up. Stories are running almost daily as to the impact on U.S. companies hit by reducing demand, and the potential impact on U.S. companies hit by new restrictions on sales into China. Nothing is yet certain, except that Huawei is caught right in the middle of this. The impact to Q2 smartphone shipments will be the first indicator as to the real hit the company has taken when those numbers come out in a few weeks time.
https://www.google.com/url?sa=i&sou...aw1AWri1yw8X6FlICDQjrjTd&ust=1559912044198018
This does not come as a surprise given that it is increasingly evident that the U.S. blacklist on Huawei’s supply chain is hitting much harder and faster than anyone expected. There have been many reports in recent days on the “softening” of Huawei’s smartphone market, which is a faster moving barometer than the larger, slower 5G equipment sales market. In a statement, though, Huawei told the Nikkei Asian Review that “its production levels remain normal,” and “sources close to the company downplayed the significance of the adjustments to its components orders.”
Huawei held onto its number two spot for global smartphone sales in the first quarter of 2019 but is expected to struggle to hold off Apple, let alone make up ground on Samsung, through the remainder of the year. The company is in the midst of launch plans for its new Hongmeng OS, an alternative to Google’s Android OS which will be withheld from the company’s future smartphones under the U.S. blacklisting.
There was speculation a week ago that a number of Huawei smartphone production lines had been cut as demand dropped. The South China Morning Post first reported that Foxconn “has stopped several production lines for Huawei phones in recent days as the Shenzhen company reduced orders for new phones.” There was no immediate response from Huawei, but three days later the company flatly denied those reports. An official spokesperson told me that “Huawei refutes these claims, our global production levels are normal, with no notable adjustments in either direction.”
Now, this latest report from Asia appears to point to back to the original report; I have reached out to the same Huawei official spokesperson for comment.
Huawei also held onto the top spot for telecoms equipment sales in the first quarter of the year, according to IHS. Again, the impact on sales through the balance of the year will be watched very closely.
Just as Samsung and Apple benefit from a drop in Huawei smartphone sales, it is Nokia and Ericsson that will be the major beneficiaries of any drop in demand for Huawei telecoms equipment. Although it won’t be clear cut. Russia has just announced that Huawei will work with the country’s MTS carrier to develop its 5G network over the coming year. Huawei described this as “good news,” an understatement under the circumstances.
It was always inevitable that in the fickle consumer market there would be a softening in demand for Huawei devices, if for no other reason than consumer uncertainty—rightly or wrongly—around Android upgrades and support. The hope for Huawei is that the launch of a new OS to settle nerves, allied with a major PR offensive, can keep any downturn as short-term as possible.
For as long as the U.S. blacklist makes headlines, though, and the media runs supply and demand stories, that will be difficult for the Shenzhen manufacturer to pull off. Unlike with equipment sales, there’s nobody on the other side of the deal “to approach to settle nerves.” And that was always the risk of shifting the company from steady equipment sales to the consumer market.
In the meantime, PR efforts continue to crank up. Stories are running almost daily as to the impact on U.S. companies hit by reducing demand, and the potential impact on U.S. companies hit by new restrictions on sales into China. Nothing is yet certain, except that Huawei is caught right in the middle of this. The impact to Q2 smartphone shipments will be the first indicator as to the real hit the company has taken when those numbers come out in a few weeks time.
https://www.google.com/url?sa=i&sou...aw1AWri1yw8X6FlICDQjrjTd&ust=1559912044198018
