Huawei expects its consumer business to grow in 2020 despite pandemic and US restrictions
Huawei had a tough 2019 when US restrictions kept it from shipping phones with Google apps installed, and then the Covid-19 pandemic hit
Yu Chengdong, chief executive of Huawei's consumer business group, said he expects revenue at the unit to grow this year despite pressure from the coronavirus health crisis, which has hit supply chains and squeezed consumer demand across the world.
Yu’s forecast, which was given in an interview with local media on Thursday, came as the Shenzhen-based company launched its latest high-end P40 series of smartphones in China. Besides China, the Google-free smartphone will be available in all markets except for the US, Brazil and South Korea.
Yu said that revenue “grew slightly in the first quarter” for the consumer business group, which includes smartphones, personal computers, and tablets.
“For the whole year, our consumer business expects to increase revenue… although this will be very difficult,” said Yu. “The China market will see solid growth, but the overseas market will see a decline.”
The Covid-19 pandemic has sickened millions and forced the temporary closure of smartphone factories across the globe after authorities imposed restrictions on large groups of people being in one place.
“It is almost impossible to avoid a decline in the global smartphone business,” Yu said. “Though sales fell in February in China, we saw growth in January and March.”
According to research firm IDC, global smartphone shipments are expected to drop 10.6% in the first half of 2020 year-on-year due to the pandemic. A decline of 2.3% is expected for the full year, with overall shipments volume at just over 1.3 billion. IDC expects global smartphone shipments to return to growth in 2021 driven by accelerated 5G efforts.
However, Yu warned about more potential risks if the US imposes further restrictions on Huawei.
A Reuters report last month said that the Trump Administration was considering tightening Huawei’s ability to access semiconductors made using US manufacturing equipment – including those made by Taiwan’s TSMC.
Last month Huawei reported 19.1 growth in revenue to a record 858.8 billion yuan (US$121 billion) in 2019. The consumer group accounted for 467.3 billion yuan of that revenue and China contributed 59% of total sales.