Technology War

Huawei strangled by United States sanctions as tech ban bites

Smartphone shipments take a massive hit as Sino-American tech war drags on

Huawei is being slowly strangled by sanctions imposed by the United States.

The Chinese 5G giant suffered a 41% drop in global smartphone shipments in the fourth-quarter of last year compared to the same period in 2019, data released by Counterpoint Research and Canalys revealed.

To illustrate the depth of the problem, Huawei’s market share dipped significantly as it struggled to compete with Chinese rivals such as Oppo and Vivo, as well as global powerhouses Apple and Samsung.

“Huawei dramatically receded in most markets as the result of US sanctions,” Amber Liu, an analyst at Canalys Research, said in a report.

The facts:

  • Huawei has dropped to sixth place after global smartphone shipments shrank to 33 million.
  • Domestic output has also fallen by more than 18.8 million smartphones.
  • Last year, the high-tech company was branded a national security risk by the US.
  • Huawei was accused of installing “back door” spyware in its smartphones.
  • The tech titan denied the allegations.
  • But Washington pressed ahead and placed the group on a blacklist, barring it from accessing foreign-made chips containing US technology.

What was said: “Huawei could have done another 30 or 40 million units this year were it not for the supply issue. Meanwhile, other brands cannot fill the gap because component supplies are not ramping up quickly enough,” Nicole Peng, of Canalys Research, said.

Reaction to the news: Huawei remained bullish despite its numbers dropping off a cliff. “Huawei has always been committed to innovation and devoted to creating more value for consumers with better products. Over the last year, our smartphone business has developed robustly, and tablets, PCs and wearables have seen significant growth. We remain confident about the future,” the company said in a statement.

China Factor comment: Last year, Huawei became the biggest casualty in the tech war between Washington and Beijing. Starved of American technology, the group has had to strip out US software and scramble to replace it with home-grown alternatives. The conglomerate has also been embroiled in a 5G infrastructure controversy because of its alleged links to China’s ruling Communist Party. For many overseas governments and consumers, Huawei is a tainted brand.

Read: ‘Wolf culture’ and ‘Rommel’ loom large at Huawei

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