Huawei’s overseas smartphone sales drop 40%

The Chinese telecom giant plans to cut production in order to survive the slowdown, says company founder Ren Zhengfei

Ren Zhengfei, founder and CEO of Huawei (AP photo)

Ren Zhengfei, founder and CEO of Huawei (AP photo)

TAIPEI (Taiwan News) – The founder and CEO of China’s Huawei Technologies, Ren Zhengfei (任正非), confirmed Monday (June 17) that overseas smartphone sales have dropped 40 percent since the U.S. clampdown, reported the Central News Agency.

Ren also admitted that Huawei is under tremendous pressure from the U.S. because Washington suspects the company might be secretly cooperating with China’s security agencies. This is the first time Ren has spoken explicitly about Huawei suffering from the U.S. crackdown.

Ren attended a panel discussion held at the telecom giant’s headquarters in the Chinese city of Shenzhen on Monday. When a journalist asked him if Huawei’s overseas smartphone sales had dropped as much as 40 percent, he confirmed this was true.

“Yes,” Ren said, “It went down 40 percent.”

He did not provide further details about the sharp decrease in sales, but a spokesperson for the company explained later that overseas smartphone sales in June had dropped 40 percent compared with May, when the U.S. blacklisted Huawei.

“The domestic smartphone market is still growing rapidly,” added Ren.

Last year, Huawei surpassed Apple and became the world’s second largest smartphone supplier after Samsung. The company is also the largest telecommunications equipment manufacturer in the world.

Huawei sold 260 million smartphones in 2018, half domestically and half overseas. The 74-year-old Ren said Huawei is planning to reduce production worth US$30 billion over the next two years in order to weather the crisis.

Huawei posted revenues of US$107 billion in 2018, so a reduction of US$30 billion will account for about 30% of its total revenue.