Huawei reportedly cuts shipments of its flagship phones

Huawei reportedly cuts shipments of its flagship phones
After being banned from accessing its U.S. supply chain, Huawei decided in May to stop taking orders for its low and mid-range handsets that aren't powered by the company's Kirin chipsets. Huawei has reportedly stockpiled a year's worth of chips and components in anticipation of such a ban, but according to Digitimes, it is now cutting shipments of its higher-end handsets. The report states that earlier this month, the company started cutting orders for the Huawei P30 line, which includes the P30 Pro. The latter is the manufacturer's most premium handset at the moment. While U.S. carriers can't stock Huawei's phones,  earlier this year retailer B&H offered U.S. consumers the Latin American version of the P30, P30 Pro and P30 Lite adding a one-year U.S. warranty. However, since the U.S. ban, B&H has stopped selling these models.

Today's report notes that Huawei has also started cutting orders for the upcoming Mate 30 series. Not expected out until October, the line includes the Huawei Mate 30 Pro; this model would normally be considered Huawei's most technologically advanced phone of the year. With the ban, it isn't clear what new features will be included in the device. Currently, expectations call for the Mate 30 Pro to sport a 6.7-inch AMOLED display with a QHD+ resolution. The device could be equipped with a pair of chips from Huawei's HiSilicon unit, namely the Kirin 985 SoC and the Balong 5000 5G modem chip.

Barring a sudden removal from the U.S. Entity List, Huawei's new phones will most likely ship with its own HongmengOS (aka ArkOS) pre-installed. Huawei has its own app distribution platform called App Gallery, but it remains to be seen how much developer support ArkOS will get.

Internally, Huawei expects its international phone shipments to drop by 40% to 60% this year. Of the 206 million units it delivered in 2018, about half were shipped out of China; that means that the company believes it will see total shipments drop by as many as 60 million handsets this year. Just last quarter, the manufacturer shipped 59 million smartphones worldwide, up over 50% year-over-year. At that pace, Huawei was on track to deliver just under 240 million units for 2019. Now the company is looking at a figure in the neighborhood of 140 million to 160 million smartphones. While Huawei planned on becoming the top smartphone manufacturer in the world next year, that goal will have to be scrapped for now.

Once Huawei uses up the inventory of Kirin chips it does have, things are going to get tough for the company. With chip design firm ARM Holdings cutting ties with Huawei (the company is headquartered in the U.K. but uses some American technology), the company might have to turn to an open source replacement. And the software from U.S. companies that the manufacturer uses to design its chips will also have to be replaced. While Huawei apparently did have the foresight to develop its own operating system and stockpile chips and key parts, it appears that the company might not have alternate plans for everything it needs to be self-sufficient.

Trump saved ZTE from a U.S. export ban; will he do the same for Huawei?

For those coming in late, Huawei ended up in this predicament because of U.S. lawmakers' fears that the company's products will spy on American corporations and consumers. Under Chinese law, the communist government can demand that Huawei gather intelligence on its behalf. Huawei has repeatedly denied that its phones and networking equipment contain any sort of backdoors; its chairman, Liang Hua, said back in February that if the Chinese government asks him to spy, he will defy them. The executive added last month that he would sign a no-spy document with any country. Ironically, that took place on the same day that the U.S. first announced Huawei's placement on the Entity List.

While U.S. President Donald Trump admitted in May that Huawei was placed on the list for security reasons, he added that "it's possible that Huawei even would be included in some kind of a trade deal. If we made a deal, I could imagine Huawei being possibly included in some form, some part of a trade deal. It would look very good for us." At this point, Huawei brass is probably hoping that the U.S. uses the company as a bargaining chip to obtain better terms from China in a new trade agreement. After all, the president was able to save ZTE from its U.S. export ban and it too is considered a national security threat.



2. dimas

Posts: 3423; Member since: Jul 22, 2014

But huawei ceo said before that they don't need US market, right? So where's his high horse now?

5. ijuanp03

Posts: 669; Member since: Dec 30, 2014

Exactly. The CEO is too arrogant and thinks they are as powerful as Apple or Samsung.

13. oldskool50 unregistered

Well they sold more phones than Apple without the US market. Without the US market, Applenwouldnt be #1, and Samsung wouldn't be number one for long without the US. Huawei beat Apple and almost beat Samsung without US. I would say that is powerful. If you don't think so then, well that's ok.

3. SyCo87

Posts: 326; Member since: Sep 19, 2013

Too bad. Huawei should just concede to the US government's demands. At least compromise.

9. mootu

Posts: 1541; Member since: Mar 16, 2017

The US government hasn't made any demands to Huawei. It is just using the company as a pawn in it's negotiations in the trade war with the Chinese government.

4. berns

Posts: 36; Member since: Jun 07, 2014

Very sad for Huawei's fate, but keep us informed if you are going to make a close out sale so that we can snap up. :D

7. Vokilam

Posts: 1387; Member since: Mar 15, 2018

This sucks for Huawei. I wish they can just show their soursecode to authorities and prove once and for all that the allegations of spyware or any sort is non-existent.. Why cant they just put this to rest. I hate seeing a company suffer if they're not guilty at all... (not being sarcastic or anything).

8. mootu

Posts: 1541; Member since: Mar 16, 2017

That would be the equivalent of Intel or Qualcomm giving it's micro code to the Chinese government, it's just not going to happen. Why should a company have to risk a foreign power messing with it's security to defend itself from baseless claims.

11. dimas

Posts: 3423; Member since: Jul 22, 2014

OS security my ass, you really are one, messed up huawei fanboi. How come samsung share their bootloader source code to 3rd party devs? If samsung is hiding something, programmers will easily find it. And they got the freaking knox, one of the best phone security apps right now.

10. tiz_meh

Posts: 79; Member since: Aug 11, 2017

40% drop out of 200 million is 80 million right? That's a minimum. Maybe I'm wrong

12. Alan01

Posts: 647; Member since: Mar 21, 2012

We are talking about international orders which numbers about 100 million last year. 60% would be 60 million units. Regards, Alan

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