According to Huawei’s internal projections obtained by The Information, the Chinese telecom giant expects its sales in 2020 to drop by as much as 20%, primarily affected by US sanctions and the Covid-19 epidemic. This is the first time that Huawei could experience a year-on-year decline in smartphone shipments after decades of rapid growth.
In 2019, Huawei’s global shipments exceeded 240 million units, however the projection for 2020 hovers between 190 million and 200 million units. According to people familiar with the matter, the decline is mainly attributed to the impact of US sanctions that, among other things, have resulted in Huawei losing access to Google’s mobile services. The non-availability of Google services is considered the main reason forcing overseas users to abandon Huawei products.
Following its challenges with US regulators, Huawei refocused its business on the Chinese market. The firm increased its share in the Chinese market from 30% to 39% in order to compensate for losses in Europe.
The Covid-19 epidemic has also had a negative impact on Huawei’s shipments. The disruption of supply chains caused by the epidemic has forced Huawei’s 4,985 stores in China either to suspend or limit their operations. Commenting on Huawei’s recent hurdles, an unnamed manager from the company’s consumer electronics division called it “a double whammy,” in a conversation with The Information, referring to the company dealing with both US sanctions and the Covid-19 epidemic.