U.S. Blacklisting Could Cost Huawei $30B Over Two Years
The formerly fast-growing maker of networking equipment and mobile devices will see its revenue sink in 2019 from last year, according to Huawei’s founder.
The U.S. government's move to prevent Huawei from acquiring American-made technology will cause the Chinese company's revenue to decline in 2019 from last year, with a total expected impact of about $30 billion over two years, according to Huawei founder Ren Zhengfei.
The comments came during an event at Huawei's headquarters in Shenzhen that was reported on by the Wall Street Journal and other outlets.
Ren forecast that Huawei's revenue for 2019 will drop to about $100 billion— from about $107 billion last year—and that the networking equipment and mobile device company will forfeit about $30 billion in overall revenue opportunity in the next two years, the Journal reported. A Huawei spokesperson did not immediately respond to a request for comment on Monday.
The U.S. blacklisting of the formerly fast-growing company has already caused one product casualty—a planned MateBook laptop that won't be launching for now, Richard Yu, CEO of the consumer division at Huawei, disclosed last week. The Information reported that Huawei could not release the new MateBook laptop as a result of lacking access to Intel chips and Microsoft's Windows operating system.
Also last week, a Huawei executive told Reuters that the company is delaying its Mate X foldable smartphone until September, from an initial launch date of June.
In May, the U.S. Commerce Department added Huawei to its so-called "entity list" that prohibits technology purchases from U.S. companies without government approval.
The agency said the decision stems from a review of information showing that there is a "reasonable basis to conclude that Huawei is engaged in activities that are contrary to U.S. national security or foreign policy interest."
This includes alleged criminal activities — among them, accusations of trade secret theft and wire fraud — in the charges filed by the U.S. Department of Justice against Huawei in January.
Huawei has denied the accusations, and company Deputy Chairman Ken Hu reportedly told employees that the Commerce Department's decision is "the latest move in the campaign against Huawei, waged by the U.S. government for political reasons."