A few days after Huawei was placed on the list of US Department of Commerce entities barring the company from accessing its US-based supply chain, the Trump administration granted a 90-day deadline to the Chinese manufacturer. During this period, US companies were allowed to ship to Huawei the components and software "necessary to maintain and support existing networks and equipment, currently fully operational, including software updates and patches." This 90-day period due to expire on Monday, unnamed sources told Reuters that the US will extend the "temporary general license" for another 90 days.
Huawei is punished by the United States for being a threat to national security; this is because the Chinese government can ask the manufacturer at any time to spy on his behalf. US lawmakers are concerned that the company has installed backdoors in its devices that will send information to Beijing once activated. Huawei, of course, has denied this on a number of occasions and President Liang Hua has offered to sign a "No-Spy" contract. Even though the ban is supposed to hurt Huawei, Huawei has spent more than $ 11 billion in supplies from the United States and this is an income that companies like Qualcomm, Intel and Micron will have. bad to replace. Last year, Huawei was Micron's largest customer and the memory chip vendor will not be able to offset the revenue losses of other companies.
Huawei has shipped 118 million phones worldwide in the first half of this year
Huawei's ban also remains a negotiating instrument that the United States can play in trying to secure favorable conditions for China in future trade talks. Both countries are engaged in a trade war that will intensify on 1 September. This is the date on which a 10% tariff (or import tax) will be placed on more than $ 300 billion of additional Chinese products imported into the states. While some products, such as cell phones (including the Apple iPhone), are part of this product group, President Trump has rebuffed the imposition of the tax on certain products (such as l '# 39; iPhone) until December 15th. The president said that he had done so in order not to increase the price of this group of products during the holiday season.
However, some Apple devices such as the AirPods Wireless Bluetooth Headphones and the Apple Watch will be taxed 10% as of September 1st. Apple will have to decide to absorb all or part of the additional tax or pass it all or part of the price of consumers. Some cases for the iPhone and the iPad are already subject to a 25% import tax, but Apple pays the extra costs to maintain the retail price of these accessories.
Huawei was to become the world's largest smartphone maker by the fourth quarter of this year. Last year, the company delivered 206 million handsets to rank third behind Samsung and Apple. For the first quarter of this year, the company has delivered 59 million units, up more than 50% on an annual basis. This put him second, in front of Apple but behind Samsung. Although the company shipped an additional 59 million phones in the second quarter, the three-month period from April to June has consistently resulted in strong sequential gains over the first quarter. The stable results recorded in the second quarter of this year are not encouraging for the company and indicate that even though 118 million phones were delivered in the first half of 2019, this ban has seriously harmed Huawei's smartphone market.
Last month, US Secretary of Commerce Wilbur Ross said his office had received more than 50 special sales license applications from Huawei and hoped to receive more. Friday night, the Commerce Department made no comment on the rumor.
