Huawei Major Cut To Smartphone Shipment Forecast, Down 20-30% Report Claims

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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,” in response to a report within the Nikkei Asian Review that cited “a source familiar with Huawei smartphone orders.” The firm has additionally “reduced or canceled orders to major suppliers for components that go into its smartphones and telecom equipment,” in response to the report. Some of the availability chain reductions “included cuts to orders of as much as 30%.”

This doesn’t come as a shock provided that it’s more and more evident that the U.S. blacklist on Huawei’s provide chain is hitting a lot tougher and sooner than anybody anticipated. There have been many studies in latest days on the “softening” of Huawei’s smartphone market, which is a sooner transferring barometer than the bigger, slower 5G gear gross sales market. In an announcement, although, Huawei advised 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 quantity two spot for world smartphone gross sales within the first quarter of 2019 however is anticipated to wrestle to carry off Apple, not to mention make-up floor on Samsung, by way of the rest of the yr. The firm is within the midst of launch plans for its new Hongmeng OS, a substitute for Google’s Android OS which can be withheld from the corporate’s future smartphones beneath the U.S. blacklisting.

There was hypothesis per week in the past that quite a few Huawei smartphone manufacturing traces had been lower as demand dropped. The South China Morning Post first reported that Foxconn “has stopped a number of manufacturing traces for Huawei telephones in latest days because the Shenzhen firm decreased orders for brand new telephones.” There was no speedy response from Huawei, however three days later the corporate flatly denied these studies. An official spokesperson advised me that “Huawei refutes these claims, our global production levels are normal, with no notable adjustments in either direction.”

Now, this newest report from Asia seems to level to again to the unique report; I’ve reached out to the identical Huawei official spokesperson for remark.

Huawei additionally held onto the highest spot for telecoms gear gross sales within the first quarter of the yr, in response to IHS. Again, the impression on gross sales by way of the stability of the yr can be watched very carefully.

Just as Samsung and Apple profit from a drop in Huawei smartphone gross sales, it’s Nokia and Ericsson that would be the main beneficiaries of any drop in demand for Huawei telecoms gear. Although it will not be clear lower. Russia has simply introduced that Huawei will work with the nation’s MTS service to develop its 5G community over the approaching yr. Huawei described this as “good news,” an understatement beneath the circumstances.

It was all the time inevitable that within the fickle client market there could be a softening in demand for Huawei gadgets, if for no different cause than client uncertainty – rightly or wrongly – round Android upgrades and assist. The hope for Huawei is that the launch of a brand new OS to settle nerves, allied with a significant PR offensive, can hold any downturn as short-term as attainable.

For so long as the U.S. blacklist makes headlines, although, and the media runs provide and demand tales, that can be troublesome for the Shenzhen producer to drag off. Unlike with gear gross sales, there’s no person on the opposite facet of the deal “to approach to settle nerves”. And that was all the time the chance of shifting the corporate from regular gear gross sales to the buyer market.

In the meantime, PR efforts proceed to crank up. Stories are operating virtually each day as to the impression on U.S. corporations hit by lowering demand, and the potential impression on U.S. corporations hit by new restrictions on gross sales into China. Nothing is but sure, besides that Huawei is caught proper in the course of this. The impression to Q2 smartphone shipments would be the first indicator as to the actual hit the corporate has taken when these numbers come out in a couple of weeks time.

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