2020 to be difficult for Huawei, but no shortage of supplies
KUALA LUMPUR: Huawei Technologies Co, Ltd (Huawei) is set to face an even more challenging year in 2020, but assures that there is no shortage in supplies for the short term as production has resumed in China.
According to rotating chairman Eric Xu during a question and answer session at Huawei’s 2019 annual report press conference on Tuesday, while 2019 was a difficult year for the group, it will be even more challenging this year.
“I have to say that 2019 was probably the most difficult year for Huawei. However, even in 2019, we had still enjoyed very fast growth before May 16. We also have substantial stockpile in our inventory to respond to customers’ needs,” Xu responded to a question from the media.
“In that context, I think in 2020, it will be more difficult. It’s going to be the most difficult year for Huawei, because we will be subject to anti-delisting throughout the year. According to some in the industry, Huawei’s inventories that were put in place beforehand are about to run out.
“Therefore, 2020 is going to be a very crucial year to test whether Huawei’s supply continuity program can really work in an effective way. On top of that, the outbreak of coronavirus is something unexpected. It brings about new unexpected challenges like economic decline, financial turmoil and also shrinking market demand.
“As the global pandemic is still fast developing, our current priority is to first ensure the health and safety of our employees and on that basis, respond to the needs and requirements of our customers and also governments around the world in their fight against the pandemic.”
For that reason, Xu said that they do not have the time yet to either forecast or evaluate how this year’s numbers will look like.
“As a matter of fact, at this point of time, it is very difficult to make an accurate forecast. In 2020, we will try everything we can to continue to survive so that we can release our 2020 annual report at the same time next year.”
Regarding the sales prospects of Huawei 5G phones in markets outside China, Xu recapped that after May 16 of last year, all newly launched Huawei phones could not have Google Mobile Services (GMS) pre-installed.
In order to protect the interest and also user experience of all Huawei smartphone users globally, Huawei launched Huawei Mobile Services (HMS).
“We also hope that the applications from Google can be also hosted in Huawei’s app store, our AppGallery. Just like how they are doing with Apple’s App Store.
“This can help deliver more and better applications that can be made available to consumers. That could also help to ensure all the users of Huawei 5G smartphones outside of China can also be users of Google’s applications.
“It’s certainly our hope that we can sell more 5G smartphones in markets outside China but it’s truly difficult for us to make an accurate forecast as of now. It largely depends on how the progress will look like, in terms of our ecosystem around HMS.”
On supplies to customers and partners worldwide, Xu assured that there will be no shortage in the short term as all production activities in China have resumed.
“Till today, all the production activities in China have been fully restored. Therefore, there will be no problem in the short term for us to continue supplying our customers and partners around the world.
“At the same time, the coronavirus is still spreading, especially outside of China. If that cannot be well controlled, it will cause challenges.
“At this point of time, we certainly cannot say for sure how the pandemic will evolve. If it cannot be well controlled, if some individual suppliers of Huawei cannot continue supplying to us, it will cause long term challenges.
“It will also cause uncertainty regarding whether Huawei will continue to supply to the market. Of course, this is something that we definitely don’t want to see and we’re also working hard on our side as well.”