Huawei founder: US crackdown will cost the company $30 billion, 40% drop in overseas smartphone sale

[F-22Raptor]

SHENZHEN, China (AP) — Huawei’s founder said Monday that the Chinese telecom giant’s revenue will be $30 billion less than forecast over the next two years, as he compared the company to a “badly damaged plane” as a result of U.S. government actions against it.

“We never thought that the U.S.’s determination to attack Huawei would be so strong, so firm,” Ren Zhengfei, who is also the CEO, said during a panel discussion at company headquarters in Shenzhen.

Ren said Huawei will reduce capacity and expects revenues of about $100 billion annually for the next two years, compared to $105 billion in 2018. In February, he said the company was targeting $125 billion in 2019.

Huawei’s overseas cellphone sales will drop by 40%, Ren said, confirming a Bloomberg report published Sunday. But the Chinese market is growing rapidly, and Huawei will not allow restrictive measures to curb its research and development, he added.

Huawei is embroiled in an ongoing trade dispute between China and the U.S., which has accused Chinese companies such as Huawei of committing forced technology transfers and stealing trade secrets. Last month, the U.S. placed Huawei on its “Entity List,” which effectively bars American companies from selling components to Huawei without government approval.

https://www.usatoday.com/story/tech/2019/06/17/huawei-founder-us-crackdown/1475224001/

 

[Mav3rick]

SHENZHEN, China (AP) — Huawei’s founder said Monday that the Chinese telecom giant’s revenue will be $30 billion less than forecast over the next two years, as he compared the company to a “badly damaged plane” as a result of U.S. government actions against it.

“We never thought that the U.S.’s determination to attack Huawei would be so strong, so firm,” Ren Zhengfei, who is also the CEO, said during a panel discussion at company headquarters in Shenzhen.

Ren said Huawei will reduce capacity and expects revenues of about $100 billion annually for the next two years, compared to $105 billion in 2018. In February, he said the company was targeting $125 billion in 2019.

Huawei’s overseas cellphone sales will drop by 40%, Ren said, confirming a Bloomberg report published Sunday. But the Chinese market is growing rapidly, and Huawei will not allow restrictive measures to curb its research and development, he added.

Huawei is embroiled in an ongoing trade dispute between China and the U.S., which has accused Chinese companies such as Huawei of committing forced technology transfers and stealing trade secrets. Last month, the U.S. placed Huawei on its “Entity List,” which effectively bars American companies from selling components to Huawei without government approval.

https://www.usatoday.com/story/tech/2019/06/17/huawei-founder-us-crackdown/1475224001/

In the short term, the trade war will damage Huawei's telecom business. However, in the long run the move will damage Alphabet (particularly Google) and other US companies more, once Huawei introduces homegrown OS with apps that cater to the larger Chinese market. In addition, if Huawei OS is good enough and supports Android apps with Google/Badeui maps etc., Huawei will recover very quickly.

 

[HannibalBarca]

In the short term, the trade war will damage Huawei's telecom business. However, in the long run the move will damage Alphabet (particularly Google) and other US companies more, once Huawei introduces homegrown OS with apps that cater to the larger Chinese market. In addition, if Huawei OS is good enough and supports Android apps with Google/Badeui maps etc., Huawei will recover very quickly.

The World is not CN market...
CN brands may adopt that CN OS for local market... but for foreign markets... Users will prefer a widely used and integrated OS as Android...

Huawei may lower the price of their devices to win over some markets like in Africa or Asia but that's it... there is a point to how low you can get...

PS: Even Google is preparing itself to move over Android OS in the coming decade, with their incoming Fuchsia OS... which aim to cross platform...

PS: As for Huawei new OS... Google can cut off the App store support... therefore making any Buyers of that Os/Phone outside of China cut off from Android ecosystem...

 

[Viet]

SHENZHEN, China (AP) — Huawei’s founder said Monday that the Chinese telecom giant’s revenue will be $30 billion less than forecast over the next two years, as he compared the company to a “badly damaged plane” as a result of U.S. government actions against it.

“We never thought that the U.S.’s determination to attack Huawei would be so strong, so firm,” Ren Zhengfei, who is also the CEO, said during a panel discussion at company headquarters in Shenzhen.

Ren said Huawei will reduce capacity and expects revenues of about $100 billion annually for the next two years, compared to $105 billion in 2018. In February, he said the company was targeting $125 billion in 2019.

Huawei’s overseas cellphone sales will drop by 40%, Ren said, confirming a Bloomberg report published Sunday. But the Chinese market is growing rapidly, and Huawei will not allow restrictive measures to curb its research and development, he added.

Huawei is embroiled in an ongoing trade dispute between China and the U.S., which has accused Chinese companies such as Huawei of committing forced technology transfers and stealing trade secrets. Last month, the U.S. placed Huawei on its “Entity List,” which effectively bars American companies from selling components to Huawei without government approval.

https://www.usatoday.com/story/tech/2019/06/17/huawei-founder-us-crackdown/1475224001/

like a damaged plane?
Didn’t he say he had his company being prepared for such US assault since 10 years?

 

[CHN Bamboo]

He also said the company would fully recover by 2021.
The crackdown on Huawei by the United States is bad for Huawei in the short term and good in the long run.
Ren said a lot, but the US media only selected a very small part of what he said.

In addition, no one seems to care that Samsung's profit fell 60.2% in the first quarter of this year.

 

[Mav3rick]

The World is not CN market...
CN brands may adopt that CN OS for local market... but for foreign markets... Users will prefer a widely used and integrated OS as Android...

Huawei may lower the price of their devices to win over some markets like in Africa or Asia but that's it... there is a point to how low you can get...

PS: Even Google is preparing itself to move over Android OS in the coming decade, with their incoming Fuchsia OS... which aim to cross platform...

PS: As for Huawei new OS... Google can cut off the App store support... therefore making any Buyers of that Os/Phone outside of China cut off from Android ecosystem...

China is one of the largest smartphone markets and this is where Apple/Samsung will lose big. Not just that, Google can block Huawei access to Play Store, however if the Huawei OS is compatible with Android, as it is said to be, Huawei can simply allow Android App Developers to host their Apps on Huawei Play Store.........and the developers would gladly do that. At the end of the day, it is trade that loses and many many American companies, not just Huawei. Worst for the US, if Huawei is able to pull off a coup and establish a fully functional alternative to Google Play Store then it would be game over for US blackmail.

 

[HannibalBarca]

China is one of the largest smartphone markets and this is where Apple/Samsung will lose big. Not just that, Google can block Huawei access to Play Store, however if the Huawei OS is compatible with Android, as it is said to be, Huawei can simply allow Android App Developers to host their Apps on Huawei Play Store.........and the developers would gladly do that. At the end of the day, it is trade that loses and many many American companies, not just Huawei. Worst for the US, if Huawei is able to pull off a coup and establish a fully functional alternative to Google Play Store then it would be game over for US blackmail.

The Question is not if the can do it or not... is ''Can they do it...before falling''...

 

[Globenim]

The Question is not if the can do it or not... is ''Can they do it...before [Apple and Google are] falling''...

Interesting question. This minor setback, from Americans going all out on the foul play and dirty business practises, might give especially Apple some time to fall apart seemingly on its own and every sour grape here could cope with some "Apple was in trouble for years anyways, but what counts is America was first" excuses as we know them too well, when Huawei inevitably takes over.

 

[HannibalBarca]

Interesting question. This minor setback, from Americans going all out on the foul play and dirty business practises, might give especially Apple some time to fall apart seemingly on its own and every sour grape here could cope with some "Apple was in trouble for years anyways, but what counts is America was first" excuses as we know them too well, when Huawei inevitably takes over.

biz practice is a universal code... that EVERY country do... Including the US and CHINA...
China local market is meant for local brands and the Gov used and still ban many US or Western entities (mostly IT companies) to favor CN made alternatives.
Does that make them bad? No really it's all part of the game.
So calling one side to justify the behavior of the other side is not just.

Now, Apple and Google have little chance to fall in the coming future, let's be honest with both of us... Google have almost nothing in CN market, where Google only ''Trace'' is Android. and as of Apple, compared to the World CN is a small part even though there is 1.3B ppl in it.

Now huawei OS have a chance to survive in the long run... The Q is will they profit from it before they are losing too much to the point of impacting their mobile biz.
Other Companies in the past tried to make their own OS in hope to curb Android, who at their Time were seen as ''Big'' Like Blackberry/Nokia etc... And they failed not because they couldn't give to others a proper OS... but they were unable to profit from it with their own massive devices sell... because their ecosystem was restricted... (ie only allowed on their own device)

That's where Android shine... It's Everywhere for All... and It's very very cheap for Phone makers...

The Huawei challenge is... Could they last long enough for it to be adopted by many? In this current state of affair it's difficult to believe so and rightfully so...

 

[Mrc]

China shud.do.same with apple

 

[Kaniska]

The World is not CN market...
CN brands may adopt that CN OS for local market... but for foreign markets... Users will prefer a widely used and integrated OS as Android...

Huawei may lower the price of their devices to win over some markets like in Africa or Asia but that's it... there is a point to how low you can get...

PS: Even Google is preparing itself to move over Android OS in the coming decade, with their incoming Fuchsia OS... which aim to cross platform...

PS: As for Huawei new OS... Google can cut off the App store support... therefore making any Buyers of that Os/Phone outside of China cut off from Android ecosystem...

Exactly...People prefer to use the OS that is globally used and acccessible rather than something specific to Chines audiences..
And also, even google and other companies may follow the ban by US gov..

 

[JSCh]

The CEO, Ren said he is surprise by US taking such extreme measure against Huawei.

I think it is a surprise to everyone that a powerful gov't would go to such length to punish a private company, while wasn't even able to clearly articulate and proven what said private company did wrong.

A Goliath acting like a bully, it is conduct unbecoming of a superpower.

Anyway, below is what Ren said.

19:22, 17-Jun-2019
Key quotes from the discussion with Huawei CEO and U.S. tech gurus
By Zhou Minxi, Yu Jing

In a wide-ranging discussion held at the company’s Shenzhen headquarters, Huawei founder and CEO Ren Zhengfei, together with two American technical gurus, George Gilder and Nicholas Negroponte, addressed some of the most pressing issues facing Huawei and society.

Below are some of the key quotes from the discussion. The three discussed issues ranging from how Huawei will deal with the U.S. trade ban to security concerns about Huawei’s 5G network. The two technological gurus also provided their insights on what society will look like in the age of AI and blockchain technology.

On disruption to Huawei's supply chain:

Ren Zhengfei:

"It didn't occur to us that the U.S. government is so determined to take extreme measures against Huawei. It didn't occur to us that they would take such a wide range of measures to restrict Huawei. But we believe these restrictive measures would not stop our way."

Huawei founder and CEO Ren Zhengfei, screenshot from CGTN Live

On Huawei's future:

Ren Zhengfei:

"In the next two years, we will reduce our capacity. Our revenue will be down by about 30 billion U.S. dollars. So our sales revenue this year and next will be about 100 billion dollars. By 2020 we may regain our growth momentum to contribute more to human society."

"In the next five years, we are going to invest 100 billion U.S. dollars to reshape the network architecture so that the network will be simpler, faster, and most trustworthy."

"If we have some financial challenge, we would not reduce our research and development investment. We would reinvent ourselves to contribute to human society."

"We would not have spinoff or sale. We might shrink our size. And we can reallocate our people from non-core business to core business. Huawei would not reduce our headcount substantially, but business consolidation has been ongoing."

On Huawei's 'Sputnik moment':

Nicholas Negroponte:

"As a teenager I experienced Sputnik. It's very interesting because Sputnik caused the United States to do things that it wasn't already doing, so this is your Sputnik moment. What the United States has done created Huawei's Sputnik. You are going to wake up and do things and there is no going back."

"I saw again in the 1980s with Japan. There was a whole period when Japan was this enemy, and we were not supposed to collaborate. Now we are going through a Japan moment in China. And I hope that plays itself out."

Nicholas Negroponte, co-founder of MIT Media Lab, screenshot from CGTN Live

On backdoors:

Nicholas Negropronte:

"Our president has said publicly that he would reconsider Huawei if we can make a trade deal, so clearly it is not about national security, because we don't trade national security."

Ren Zhengfei:

"[There is] 100 percent no backdoor in Huawei equipment. We can sign no backdoor agreements with all governments that are willing to enter into this. Why don't they sign with Huawei first? They can take Huawei as an example of negotiating with others (equipment providers)."

On technological Cold War and China-U.S. decoupling:

George Gilder:

"It's the United States that will suffer from any efforts to "decouple"… What we see here in historic terms, is merely the incumbent established technology power, the United States, challenged by an ascendant power, China. And we are trying to beat them back. That's a terrible, suicidal mistake for the U.S. to make. So I'm being pro-American when I say, America has got to deal with Huawei and with the existence of challengers around the world."

"It's false [to think] that the U.S. is in an impregnable position that it doesn't have to collaborate with China and other countries around the world. It is an illusion from years gone by. And we have to get over it if we are going to accept the challenges of the future and accomplish the goals we have."

Futurist and economist George Gilder, screenshot from CGTN Live

Nicholas Negropronte:

"If you look at the media lab, it's 60 percent foreign students. So when people say, wait a minute, you are training our competition. No. We are elevating the whole world."

"It is so old-fashioned to think that when you have something then I don't. Unfortunately President Trump thinks that way. He doesn't think in a way that we can both have it, and we can elevate it and go up."

 

[Nancy]

This is just he beginning. Actual loss is >$100B he is just trying to appease investors.

Worst part is that if Trump really put the pressure, all EU 5G contracts will be cancelled, no one want to have any business with Huawei, under these circumstances. This is literally the death of Huawei.

 

[Yaseen1]

This is price of freedom.I think huawei should drop prices of its product even if they are required to sale it for cost incurred without taking any profit.This will damage u.s products demand which have high price and huawei will get greater market share

 

[Bussard Ramjet]

The CEO, Ren said he is surprise by US taking such extreme measure against Huawei.

I think it is a surprise to everyone that a powerful gov't would go to such length to punish a private company, while wasn't even able to clearly articulate and proven what said private company did wrong.

A Goliath acting like a bully, it is conduct unbecoming of a superpower.

Anyway, below is what Ren said.

19:22, 17-Jun-2019
Key quotes from the discussion with Huawei CEO and U.S. tech gurus
By Zhou Minxi, Yu Jing

In a wide-ranging discussion held at the company’s Shenzhen headquarters, Huawei founder and CEO Ren Zhengfei, together with two American technical gurus, George Gilder and Nicholas Negroponte, addressed some of the most pressing issues facing Huawei and society.

Below are some of the key quotes from the discussion. The three discussed issues ranging from how Huawei will deal with the U.S. trade ban to security concerns about Huawei’s 5G network. The two technological gurus also provided their insights on what society will look like in the age of AI and blockchain technology.

On disruption to Huawei's supply chain:

Ren Zhengfei:

"It didn't occur to us that the U.S. government is so determined to take extreme measures against Huawei. It didn't occur to us that they would take such a wide range of measures to restrict Huawei. But we believe these restrictive measures would not stop our way."

Huawei founder and CEO Ren Zhengfei, screenshot from CGTN Live

On Huawei's future:

Ren Zhengfei:

"In the next two years, we will reduce our capacity. Our revenue will be down by about 30 billion U.S. dollars. So our sales revenue this year and next will be about 100 billion dollars. By 2020 we may regain our growth momentum to contribute more to human society."

"In the next five years, we are going to invest 100 billion U.S. dollars to reshape the network architecture so that the network will be simpler, faster, and most trustworthy."

"If we have some financial challenge, we would not reduce our research and development investment. We would reinvent ourselves to contribute to human society."

"We would not have spinoff or sale. We might shrink our size. And we can reallocate our people from non-core business to core business. Huawei would not reduce our headcount substantially, but business consolidation has been ongoing."

On Huawei's 'Sputnik moment':

Nicholas Negroponte:

"As a teenager I experienced Sputnik. It's very interesting because Sputnik caused the United States to do things that it wasn't already doing, so this is your Sputnik moment. What the United States has done created Huawei's Sputnik. You are going to wake up and do things and there is no going back."

"I saw again in the 1980s with Japan. There was a whole period when Japan was this enemy, and we were not supposed to collaborate. Now we are going through a Japan moment in China. And I hope that plays itself out."

Nicholas Negroponte, co-founder of MIT Media Lab, screenshot from CGTN Live

On backdoors:

Nicholas Negropronte:

"Our president has said publicly that he would reconsider Huawei if we can make a trade deal, so clearly it is not about national security, because we don't trade national security."

Ren Zhengfei:

"[There is] 100 percent no backdoor in Huawei equipment. We can sign no backdoor agreements with all governments that are willing to enter into this. Why don't they sign with Huawei first? They can take Huawei as an example of negotiating with others (equipment providers)."

On technological Cold War and China-U.S. decoupling:

George Gilder:

"It's the United States that will suffer from any efforts to "decouple"… What we see here in historic terms, is merely the incumbent established technology power, the United States, challenged by an ascendant power, China. And we are trying to beat them back. That's a terrible, suicidal mistake for the U.S. to make. So I'm being pro-American when I say, America has got to deal with Huawei and with the existence of challengers around the world."

"It's false [to think] that the U.S. is in an impregnable position that it doesn't have to collaborate with China and other countries around the world. It is an illusion from years gone by. And we have to get over it if we are going to accept the challenges of the future and accomplish the goals we have."

Futurist and economist George Gilder, screenshot from CGTN Live

Nicholas Negropronte:

"If you look at the media lab, it's 60 percent foreign students. So when people say, wait a minute, you are training our competition. No. We are elevating the whole world."

"It is so old-fashioned to think that when you have something then I don't. Unfortunately President Trump thinks that way. He doesn't think in a way that we can both have it, and we can elevate it and go up."

China is not yet in a position to fight back! It is a premature fight from Chinese viewpoint

You would be wise to ease off tensions with US, find a solution. Trump has already said that he'll ease off sanctions on Huawei as part of a deal.