U.S. supply chain ban to hurt Huawei's phone sales much less than originally thought

U.S. supply chain ban to hurt Huawei's phone sales much less than originally thought
When Huawei was placed on the U.S. Commerce Department's Entity List in May, it seemed like the manufacturer was in for a very bad year; after all, the company was banned from purchasing components and software from its U.S. supply chain. Companies like Google, Qualcomm, Micron and ARM Holdings cut ties with the company and the rest of 2019 seemed bleak. In 2018 Huawei had shipped 206 million handsets globally, good enough for third place after Samsung and Apple and was expected to take the top spot next year. But a strong first quarter that saw phone deliveries rise 50.3% to 59 million had many analysts figuring that Huawei would surpass Samsung by the fourth quarter of 2019.

But then came the Entity List. And while Huawei did ship another 59 million units in the second quarter for a 33% annual gain and a first-half total of 118 million, the company traditionally reports a big improvement from Q1 to Q2. The fact that this number was flat sequentially indicated that the U.S. ban was having a negative impact on Huawei, something the company admitted in June. But how much of an effect is it having? After all, the manufacturer continues to push out new phones powered by Android and earlier this week it released a teaser for its Kirin 990 chipset; the latter will feature ARM designed CPU cores including the latest and greatest Cortex-A77. Huawei owns a perpetual license for the ARMv8 license allowing it to introduce new chips such as the Kirin 990 and the Ascend 910 AI chipset it announced last week. Huawei says that the 7nm chip is the most powerful AI chipset in the world. Huawei did have to stop using chip designing software from U.S. firms like Cadence Design Systems Inc and Synopsys.

Huawei's rotating chairman says that the 90-day reprieves offered by the U.S. government are meaningless


Back in June, Huawei founder and CEO Ren Zhengfei said that the U.S. ban would cost it $30 billion in smartphone revenue. But an updated estimate was given by Huawei's rotating chairman Eric Xu and reported by Reuters. The executive said that Huawei's consumer business group, the unit that includes smartphones, is doing better than expected, but notes that it could lose $10 billion in smartphone revenue due to the ban. The division grossed 349 billion yuan ($49.2 billion USD) last year and for the first half of this year it generated 221 billion yuan in sales ($31.1 billion USD).


Days after the U.S. announced that Huawei was placed on the Entity List, the U.S. gave stateside Huawei suppliers the opportunity to obtain a special 90-day license. This allowed them to ship to the manufacturer components and software "necessary to maintain and support existing and currently fully operational networks and equipment, including software updates and patches...to existing Huawei handsets." When the first 90-day period expired earlier this month, the Commerce Department offered Huawei's U.S. suppliers the chance to obtain another special 90-day license. Huawei's Xu says that these 90-day reprieves are "meaningless" to Huawei and that the company's employees are fine working around the ban.

Next month, Huawei is expected to unveil the Mate 30 series including its new premium Mate 30 Pro model. The latter is expected to feature a 6.7-inch AMOLED waterfall display with both sides dropping down at an 88-degree angle. Those staring straight at the screen will be hard-pressed to spot the side bezels on the phone. There will be a quad-camera setup on the back, including a Time of Flight (ToF) sensor for an improved bokeh effect on portraits, and a 4500mAh capacity battery will be keeping the lights on. That could be followed up in November with the release of the foldable Huawei Mate X.

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51 Comments

1. gadgetpower

Posts: 168; Member since: Aug 23, 2019

This is getting worse. In time, chinese will make their own OS and leave android.

2. Venom

Posts: 3573; Member since: Dec 14, 2017

Good riddance. We wouldn't have to worry about Chinese malware and backdoor attacks on Android as much.

6. meanestgenius

Posts: 22067; Member since: May 28, 2014

No, we just have to worry about backdoors placed on behalf of the government and malware from elsewhere. The issue isn’t from one source, and you’ve yet to provide evidence of Huawei producing malware or backdoors.

18. Venom

Posts: 3573; Member since: Dec 14, 2017

Of course you would turn a blind eye. I've posted stuff before that shows how shady Huawei is. Maybe you should stop pulling the wool over your eyes.

26. meanestgenius

Posts: 22067; Member since: May 28, 2014

Of course you would turn a blind eye and deaf ear to what I just said. You’ve posted absolutely nothing to prove anything about Huawei being “shady”, so stop it with the melodramatics. Maybe you should take your own advice and pull the wool from your eyes and stop allowing yourself to be spoon fed propaganda.

42. Venom

Posts: 3573; Member since: Dec 14, 2017

No one is spoonfeeding me anything. You are just trying to justify your position as a Huawei apologist. I could post links all day, but you know what they say, "can lead a horse to water, but you can't make it drink." You just have to put up with the sh- that comes out of its(you) mouth.

48. meanestgenius

Posts: 22067; Member since: May 28, 2014

Lmao you’re being spoon fed propaganda like a one year old is spoon fed it’s food. You’re just denying it because you want to deflect from the fact that you use that to keep up your position as a xenophobe. I could post links to counter your links, but you know what they say: “Common sense is not common.” Luckily, I don’t have to put up with the sh- that comes from your mouth. I get you to eventually close it every time, lol.

22. oldskool50

Posts: 1550; Member since: Mar 29, 2019

The US Govt has yet to show any either.

10. tbreezy

Posts: 30; Member since: Aug 11, 2019

Nothing more hilarious than an Android user talking about not having to worry about backdoors and malware :’D You’d have to worry about them with or without the Chinese being involved, don’t be so naive, the whole OS is built on being one big backdoor to people’s data, this is Google we are talking about.

13. yalokiy

Posts: 1000; Member since: Aug 01, 2016

@tbreezy Android alone is fine, as long as you don't use Google services (needs custom rom flashing).

30. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

Android is built around Goole services...

19. Venom

Posts: 3573; Member since: Dec 14, 2017

You're one to talk. At least I don't have to worry about a random string of text crashing my device like it does on the iPhone. And don't even get me started on the vulnerabilities that plague ios users.

31. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

That bug was fixed - it will probably show up again and it will be fixed again; but how can one fix the fact that all the personal data was exposed? "And don't even get me started on the vulnerabilities that plague ios users." Don't, because it's not even a challenge to pick a winner in a direct comparison.

23. oldskool50

Posts: 1550; Member since: Mar 29, 2019

No you dont have to worry. You only have to worry if you download apps from questionable sources, even if those questions le sources are on the PlayStore. If you don't download pointless apps for wallpapers and stuff, you don't have to worry. And since o use a Samsung device, Knox adds an extra layer of protection. If you actually have to worry, then it means you are doing g something with your device that you shouldn't.

12. yalokiy

Posts: 1000; Member since: Aug 01, 2016

US will lose their spy grip that they have with Android and other tech that Chinese import from US and their allies. I think Trump is only leading US to isolation and downfall.

20. Venom

Posts: 3573; Member since: Dec 14, 2017

Not saying that I agree with everything going on in this administration, but I don't think it's a bad idea to ween ourselves off of Chinese dependency and influence.

25. yalokiy

Posts: 1000; Member since: Aug 01, 2016

"Chinese dependency and influence" It's more the other way around. Chinese companies depend on US tech. US companies make money on selling tech to Huawei. Now Trump has prohibited selling tech to Huawei. It's Chinese that will depend less on US, although forcibly.

28. meanestgenius

Posts: 22067; Member since: May 28, 2014

The U.S. attempts to or is influencing just about every country in the world. It’s not a bad idea for the rest of the world to ween themselves off of their influence. The current administration is turning the U.S. into an isolationist country, which is something you seem to wholeheartedly support.

43. Venom

Posts: 3573; Member since: Dec 14, 2017

You are just trying to justify your circle jerk of Huawei. I only support China being made to play on an even playing field and not have them control all the goods that come into our country.

49. meanestgenius

Posts: 22067; Member since: May 28, 2014

You’re just trying to justify the circle jerk of Huawei haters. Be careful, your xenophobic ways are showing.

52. mootu

Posts: 1520; Member since: Mar 16, 2017

China doesn't control anything that comes into the US. The US's importers order them and you lot buy them, it's all down to US consumption.

3. Venom

Posts: 3573; Member since: Dec 14, 2017

I'm tired of hearing about Huawei. Let them stew in their own muck.

4. Poptart2828

Posts: 396; Member since: Jan 23, 2018

Huawei is bound to dominate rightfully so. Bring on all the good Chinese oems and put everyone else on alert. Maybe finally phones will be exciting and tech can move along faster than the snails pace Apple pushes it.

24. oldskool50

Posts: 1550; Member since: Mar 29, 2019

None of those phone do anything no one else is doing. There just cheaper.

33. jiangqiushi

Posts: 17; Member since: May 28, 2019

that's because everyone else copy Huawei phone's features, like what Apple and Google will do in this year's iphone and pixels for 3 or 4 cameras.

5. Alcyone

Posts: 395; Member since: May 10, 2018

Huawei the only company with the capacity to spy? Really. It'd be naive to think only Huawei was the only company that could be told to "spy". They got caught now, or so they say. Surely your own government wouldn't ask, be denied and then resort to such actions? Black pot, meet black kettle. However, in time this bs trade circus will drive a recession and Huawei will be laughing. Reboot 2007 and some. Huawei will eventually be number one, sad but true. Deal with it.

7. meanestgenius

Posts: 22067; Member since: May 28, 2014

Huawei has been the most innovative out of all of the Android OEM’s lately, IMO. They’ve been pushing the envelope, which in turn forces other Android OEM’s to step their game up. There is a good reason why they’ve been so dominant in Android. Competition is good for consumers, and Huawei is definitely competitive.

21. Venom

Posts: 3573; Member since: Dec 14, 2017

Imitation, not innovation. They haven't really been pushing anything. No one is denying that competition is good. It's just that Huawei isn't really good competition.

27. meanestgenius

Posts: 22067; Member since: May 28, 2014

They’ve pushed more innovation than most Android OEM’s have, especially concerning smartphones. And let’s not talk about imitation when Google made an ode to the iPhone with their Pixel devices. If Huawei wasn’t good completion, they wouldn’t be the #2 smartphone OEM on the planet, but so nice of you to point out your denial, lol.

44. Venom

Posts: 3573; Member since: Dec 14, 2017

Gee it's almost as if Huawei is a Chinese company located in China, one of the largest populated country in the world. I'm sure that has nothing to do with them being #2. And #2 is quite fitting lol.

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