Huawei shipments could fall by a quarter this year – Analysts – capitalwatch.com

author: Reuters

HUNG KONG / SHANGHAI (Reuters) – China's Huawei, hit by heavy US sanctions, could see its shipments fall by a quarter this year and risk seeing its smartphones disappear from international markets, badysts said.

Smartphone shipments at Huawei, the world's second largest smartphone maker, could fall between 4% and 24% in 2019 if the ban remains in effect, according to Fubon Research and Strategy Analytics.

Several experts said to expect a decrease in shipments from Huawei over the next six months, but declined to give a rough estimate because of uncertainties surrounding the ban.

The US Department of Commerce has prevented Huawei from buying US products last week due to the upsurge in its trade with China.

The ban applies to goods and services containing at least 25% of the technology or materials of US origin, and may therefore relate to non-US companies.

Technology companies, including Google and SoftBank's ARM chip designer, have announced they will stop providing supplies and updates to Huawei.

"If Huawei loses access to Google, the smartphone market in Western Europe could disappear next year," said Linda Sui, strategy manager for wireless smartphones at Strategy Analytics.

She predicts that Huawei handset shipments will decline another 23 percent next year, but believes the company could survive on the size of the Chinese market.

Fubon Research, which previously predicted that Huawei will ship 258 million smartphones in 2019, is now expecting the company to ship only 200 million in the worst case scenario.

According to industrial tracker IDC, Huawei occupies nearly 30% of the global market and shipped 208 million phones last year, half of which went to markets outside of China. The company sees Europe as the most important market for its high-end smartphones.

Who wins?

Huawei said it has developed the technology needed to be self-sustaining for years.

But experts do not buy the claim of the company.

They added that the key components and intellectual property required for Huawei's devices are not available outside of the United States.

Huawei should potentially lay off thousands of people and "disappear as a global player for some time," said Stewart Randall, head of the chip business at Intralink's Shanghai-based consultant.

Potential buyers of Huawei phones will likely switch to high-end devices from Samsung Electronics and Apple Inc., and will also buy mid-range phones from domestic rivals OPPO and Vivo, badysts said.

"This leaves behind a market share that can be picked up by competitors, especially Samsung given its strength in regions like Europe," said Bryan Ma, who is conducting research in the global market. smartphones at IDC.

Huawei phones are already attracting fewer clicks from online shoppers since the United States blacklisted the company, according to PriceSpy, a product comparison site that attracts an average of 14 million visitors a month.

"Over the last four days, the popularity of Huawei phones has dropped, they have recorded nearly half as many clicks as the UK and 26% less on the world stage," PriceSpy said.

The export ban imposed on Huawei could also delay China's deployment in 5G, said Edison Lee, an badyst at Jefferies. Huawei said it has signed 5G contracts with 40 customers around the world.

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