HOW DID POLICY AND TRADE

WAR AFFECT HUAWEI'S SALES

Baku 2019
The US boycott on Huawei is the most heated point in US-China trade
arrangements and among semiconductor organizations. China consented to come
back to the negotiation table relying on the prerequisite that the US lift the
Huawei boycott. While the US didn't lift the boycott, it consented to restart trade
for parts not basic to national security. A couple of days after the boycott's
facilitating, Huawei CEO Ren Zhengfei shared his perspectives about the boycott,
its impact on the organization's future income, and how he intends to manage
any future bans.
Before we think about Huawei's point of view, we should talk about how Huawei
engaged in the trade war. The Trump organization prohibited US organizations
from doing any exchanging with Huawei after it blamed the Chinese giant for
undercover work and IP (licensed innovation) stealing. The boycott focused on
any innovation identified with 5G innovation. Huawei is the world's biggest
system hardware provider and an innovator in 5G innovation.
For what reason is the Trump organization focusing on Huawei?
In a meeting with Yahoo Finance, Zhengfei talked about why he thinks the Trump
organization focused on Huawei. US officials have since quite a while ago
considered Huawei a security risk and abstained from utilizing its items, so it has
little nearness in the US. Be that as it may, the Trump organization attempted to
separate Huawei by forcing an exchange restriction on it and requesting that
partners join. Zhengfei discovers this move abnormal. He trusts Huawei's US
claims identified with the infringement of US authorizes on Iran and the taking of
US IP impacted President Donald Trump's choice.
Zhengfei scrutinized Trump's strategy for blending exchange arrangements with
legitimate issues. He said it's the courts, not the administration, that handle
claims. The circumstance wasn't the first run through Trump's contribution in
quite a while came into question. In March 2018, Trump utilized his veto capacity
to drop Broadcom's obtaining of Qualcomm (QCOM) on the grounds of 5G and
national security.
Zhengfei said the organization doesn't represent a national security hazard to the
US, as its items aren't utilized in US 5G systems. He thinks Trump is just utilizing
Huawei to put pressure on the Chinese government. Huawei is attempting to
isolate itself from the exchange talks and is forgoing taking assistance from the
Chinese government.

Huawei was not set up for the US boycott

Whatever the US's aim behind the exchange boycott, Zhengfei conceded that he
wasn't set up for it. On May 15, Intel (INTC) and Qualcomm ended shipments of
chipsets, and Google (GOOG) halted Android refreshes for Huawei cell phones. In
under a month, a Bloomberg report expressed that Huawei administrators
expected abroad cell phone shipments to fall 40%–60% in 2019. The Chinese
monster expanded its endeavors in the household market to balance the fall in
abroad shipments.
As indicated by Kantar, Huawei expanded its offer in China's cell phone market to
46.1% in the subsequent quarter. Its cell phone deals in significant European
markets fell 1.9% successively in a similar period. Zhengfei disclosed to Yahoo
Finance that he expects the organization's worldwide cell phone shipments to rise
30% year-over-year to 270 million units in 2019 in spite of the boycott.
Awful news for US semiconductor players: Huawei lessens reliance on the US
Zhengfei expressed that Huawei is prepared for any future US bans. It has
decreased its reliance on US organizations for center items. It's additionally cut
the generation of noncore items that rely upon US segments. Along these lines,
Huawei will keep on working together regardless of whether US organizations
stop shipments once more.
Be that as it may, US players will miss out on a significant client. In 2018, they
earned a consolidated $11 billion from Huawei. US-based Broadcom decreased its
entire year direction by $2 billion due to the Huawei boycott. More organizations
will probably pursue Broadcom and cut their directions.
Despite the fact that Huawei decreased its reliance on US innovation, regardless it
relies upon Google's Android for its cell phone OS (working framework). Zhengfei
said that the organization's in-house Hongmeng OS isn't intended for cell phones.
It will begin building up a cell phone OS when Android isn't an alternative.
Meanwhile, it's building up a reinforcement OS.
Facilitating the Huawei boycott
US semiconductor players campaigned the legislature to facilitate the Huawei
boycott, as it put them at a genuine impediment to outside contenders. The
Trump organization facilitated the boycott during the G20 Summit in June.
Zhengfei said that some US organizations had restarted shipments of less basic
segments to Huawei. In any case, the US hasn't yet chosen whether to permit the
shipment of basic segments.
On July 22, the CEOs of Cisco, Intel, Broadcom, Qualcomm, Micron Technology,
Western Digital, and Alphabet met President Trump to talk about the Huawei
boycott. Trump concurred that the US Commerce Department would settle on an
auspicious choice on US organizations' authorizing solicitations to exchange with
Huawei.
Exactly when US-Huawei relations were facilitating, the Washington Post revealed
that Huawei was subtly helping North Korea build up a business remote system.
The disclosure may damage US controls on sending out gear to North Korea, as
Huawei utilizes US innovation. Huawei denies any ties with North Korea, similarly
as it denied US IP burglary and association with the Chinese government. Trump
says the US will explore the issue.
Huawei will miss revenue projections of about $30 billion over the next few years
due to a U.S. campaign against its business, the Chinese tech company's founder
and CEO said ;
"I think we will decrease our potential in the next two years, our profits will fall by
about $30 billion relative to the prediction, so this year and next year our sales
revenue will be around $100 billion” Ren Zhengfei said during a panel
discussion at Huawei's headquarters in Shenzhen.
Last year's sales increased to 721 billion yuan ($104 billion) by about 20 percent.
Since then, the Chinese tech company has become a flashpoint in the trade war
between the U.S. and China. On May 16, the Trump administration dealt a huge
blow by adding Huawei to a blacklist that prohibits US companies from selling the
equipment without first obtaining a U.S. government license.
Washington fears that Beijing might use its equipment to spy on other nations,
and pressures allies to shut down the company from the super-fast 5 G wireless
networks of the next generation. Huawei has repeatedly denied that any of its
products poses a risk to national security.
Despite having been locked out of the US market for nearly a decade because of
these concerns, Huawei has grown into the largest in the world. Ren's comments
come less than a week after Huawei abandoned its goal of overtaking Samsung to
become the world's No. 1 smartphone brand by the end of the year.
Some analysts say Huawei may even struggle to stay ahead of Apple (AAPL) if it
remains cut off from US technology for long.
Huawei delays the launch of its $2,600 foldable smartphone
Huawei delays the launch of its $2,600 foldable smartphone
If there are "positive developments" for Huawei in the next two months, then it
could "possibly" maintain its No. 2 position this year, according to Kiranjeet Kaur,
an analyst with research firm IDC.
"Otherwise, it will be a tough situation for Huawei, which had almost half of its
smartphone shipments in overseas markets in 2018 and the first quarter of 2019,"
she said.
The US export ban forced companies like Google (GOOGL) and Facebook (FB) to
cut Huawei off from popular apps and services, without which Huawei phones
become a lot less attractive to consumers.
Top carriers in the United Kingdom and Japan are delaying the launch of Huawei
smartphones, and suppliers outside the United States are reporting a decline in
orders from the Chinese company. The chairman of Taiwanese chipmaker TSMC,
Mark Liu, said earlier this month that "demand from Huawei has dropped so far
this year."
5G dominance at risk
Beyond smartphones, Huawei's prized position as the leader in 5G technology is
looking vulnerable.
Ren said the company had expected tough competition, and even conflict, once it
reached a position of market leadership.
"However what we didn't foresee was that the US strategic determination to
attack us would be so great, and could be so unwavering," said Ren. "We also
didn't foresee that the US would strategically attack us on so many fronts," he
added.
China's Huawei will build Russia's 5G network
China's Huawei will build Russia's 5G network
The company has invested heavily in developing the next generation of wireless
technology. Huawei and its affiliated companies have made more contributions to
the effort to establish an international standard for 5G than rivals Nokia (NOK)
and Ericsson (ERIC) combined, according to IPlytics, a market intelligence firm that
tracks tech trends.
Now, Nokia is closing the gap on Huawei by winning new 5G contracts, and some
companies are reportedly avoiding Huawei at international meetings.
South Korean carrier LG UPlus, and chipmakers Intel (INTC) and Qualcomm
(QCOM) have reportedly restricted employees from having informal
conversations with Huawei.
A spokesperson for LG UPlus, the only carrier to use Huawei in its 5G rollout in
Seoul, said "there was no formal policy within the firm about limiting
conversations with Huawei." Intel declined to comment on the matter and
Qualcomm did not respond to a request for comment.
Ren remains confident his company can survive, and he predicted the company
could return to growth in a couple of years.
"We will not be complacent, we still want to openly collaborate with the world,"
he said.
Bibliography
1- https://edition.cnn.com/2019/06/17/tech/huawei-ren-zhengfei/index.html
2- https://www.aljazeera.com/ajimpact/considers-regulations-restrict-huawei-suppliers-
191129170850092.html