Huawei

Huawei slashes revenue forecast as smartphone sales sink 40 percent

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Huawei will reduce its production capacity which could hit revenue growth, said Huawei CEO Ren Zhengfei on Monday, as he revealed his plans to deal with the continued pressure from the U.S.

“In the next two years, I think we will reduce our capacity, our revenue will be down by about $30 billion dollars compared to forecasts, so our sales revenue due this year and next will be about $100 billion,” Ren Zhengfei, founder of the telecoms equipment giant said,

Huawei is currently on a U.S. blacklist that restricts American businesses selling products to the Chinese firm. The restrictions have affected Huawei’s business as it relies on American suppliers for components and software in several of its products including smartphones and laptops.

Huawei reported revenue over $100 billion for the first time in 2018 — about 19.5% higher than 2017. Ren’s comments suggest that revenue growth will be roughly flat in 2019 and 2020.

Ren said the company is also looking at creating different versions of its products.

“In the next two years, we are going to do a lot of switch over of different product versions that will take time and that will take time to ramp up, and it will take some time to test whether that works,”.

“After that step, we will be stronger.”

Ren did not specify whether this meant using components from different suppliers.

Huawei has been developing its own operating system, which could be ready later this year in China. Ren said the company will continue to work with American companies if it can.

“In the past, when we were not as strong, we were determined to work together with U.S. companies. In the future, we will be more determined to work with US companies. We are not afraid of using U.S. components, we are not afraid of using U.S. elements,” 

“We are strong, I think there is no way we can be beaten to death,” he added.

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