The continuing trade war between the US and China with the Trump administration’s blacklisting Huawei is having an impact and the Chinese leading technology company may not reach its goal of surpassing Samsung as the top brand in smartphone sales by the end of 2020. It currently holds the number 2 spot in the world in smartphone sales.
That’s because the Trump administrations has barred American companies from trading and selling with Huawei unless they have a license to do so.
Google has suspended all accessibility to Huawei to its Android operating system as well all its apps. Theses are for new smartphones with the Huawei brand. However, it will not affect customers who already own a Huawei made smartphone.
Major chipmakers from the US are also restricting any sales of its components to Huawei. Companies like Intel, Qualcomm, Broadcom and Xilinx have suspended supplying parts until further notice, reported Bloomberg sources.
This trade ban could potentially damage Huawei’s ability to continue to do business. Although it has been preparing for a possible event like this to happen by stockpiling components, insiders say Huawei may only have enough to last for a coupleof months.
Not only does the ban on the selling of US components threaten Huawei’s supply chain but it will affect another area of Huawei’s business- its future plans of itsrollout of its 5G services around the world.
The company is placing its hopes on the ending to the US-China trade war very soon. If it doesn’t end soon, it places Huawei in a precarious position with the possibility of losing parts of its business in particular its consumer business especially outside of China which has been at 45 percent of its revenue. Its products selling outside of China include smartphones, laptops, tablets and wearable devices like smart watches all of which contributed around $50 billion to Huawei’s earnings last year.
If Huawei declines, the Chinese government will not like it because the company is a leading beacon of business in the country and it would have significant implications for the economy in China.
However, Lu Kang, who is a spokesperson for the China Ministry of Foreign Affairs, said on Monday, May 20, 2019 at a press briefing that Chinese companies who defend their legitimate rights according to law are supported by the Chinese government.