Huawei to pack less of a punch in the new year after bruising 2020

Huawei Technologies Co Ltd analysts say 5G business slows this year and software efforts go further, while smartphones are expected to be released from US sanctions that hit the heart of a chip-dependent group last year doing.

Restricted access to high-end semiconductors means rations during China’s network upgrades, and mobile arm analysis shows Huawei lower its rankings while continuing to develop its own operating system.

A major Chinese telecommunications equipment manufacturer was on the US trade blacklist in May 2019 due to national security concerns. Huawei has repeatedly denied that it is a risk.

This effectively banned US-based companies from selling Huawei’s key US technology. In August of last year, the ban was extended to foreign companies operating in the United States. Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC).

This change hits the Achilles tendon as Huawei relies on TSMC to manufacture advanced chips for mobile phones, 5th generation (5G) network base stations, servers, cloud computing, and artificial intelligence products. Given, Eurasia Group. The stockpile doesn’t last that long, he said.

“Passing this death sentence does not involve a swift execution,” technical analyst Dan Wang said in a client note. “Instead, the process is like a slow strangulation.”

Huawei declined to comment.

According to Wang, Huawei will have the most serious impact on the consumer business, which generated 54% of revenue in 2019.

In November, Huawei said sales founder Ren Zhengfei could spin off the budget smartphone line Honor and regain access to chips for brands. Huawei could do the same on the premium line this year, Triolo said.

Huawei was the world’s largest smartphone maker by the second quarter of 2020, but data company Trend Force said it is likely to be out of the top six this year due to honorary sales and a lack of chips.

That luck could change with Joe Biden’s inauguration of the US president, who expects analysts to be more generous with Huawei’s smartphone business. This month’s inauguration will take place when Chief Financial Officer Meng Wangzhou discusses a deal with a US prosecutor about a claim for a deal with Iran.

Nicole Peng, vice president of mobility for consultancy Canalys, said Huawei is likely to focus on the Harmony operating system being developed for smartphones after being separated from Alphabet Inc’s Android for the foreseeable future. I am.

Elsewhere in the software, Huawei is likely to further pivot to services such as cloud computing and Internet of Things devices, according to analysts, but these could offset the slowdown in smartphones and communications infrastructure. It is said that it is low.

Huawei’s network business has bright prospects, analysts say, but is likely to focus on China as major markets such as the UK and Japan have banned equipment.

The company has enough chips to make about 500,000 5G base station Said Edison Lee, an analyst at Jeffreys. But instead of running out of that supply, the government is likely to delay the adoption of 5G by adopting an “intermediate approach to balancing increased coverage with waiting for Huawei to catch up.” he said. Jio Forme