Huawei Says Impact of U.S. Blacklisting Less Than Expected

U.S. trade restrictions will lower Huawei’s smartphone revenues by about $10 billion this year, the firm reported. But that is much less than it originally expected.

Huawei originally projected that the trade restrictions would lower its smartphone revenues by about $30 billion.

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“It seems it is going to be a little less than that,” Huawei deputy chairman Eric Xu said this week at a news conference, noting that its smartphone business is doing “much better” than originally expected. “You have to wait until our results in March … But a (sales) reduction of more than $10 billion could happen.”

Huawei’s smartphone business had been exploding before the U.S. government got in the way: It generated about $50 billion in revenues in 2018, half of the firm’s overall revenues, and over $31 billion in the first half of 2019. Huawei, the second-biggest maker of smartphones worldwide, had expected to overtake Samsung in the top spot by the end of 2019.

Now, of course, that won’t happen. Huawei will need at least another year to recover from the impact of the U.S./China trade war and its evidence-free blacklisting by the U.S. government.

Helping matters, Huawei’s sales in China have surged since the U.S. blacklisting in a wave of patriotic support for the company. Sales in China are up over 30 percent, year over year, thanks to the U.S. action.

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Conversation 23 comments

  • Stooks

    23 August, 2019 - 1:36 pm

    <p>"<span style="color: rgb(0, 0, 0);">its evidence-free blacklisting by the U.S. government"</span></p><p><br></p><p>I am sure Paul Thurrott is right up there on the list of people that US intelligence shares that kind of information with and any day now you will be looped in on the intel.</p>

    • skane2600

      23 August, 2019 - 2:28 pm

      <blockquote><em><a href="#451307">In reply to Stooks:</a></em></blockquote><p>Apparently there isn't <em>anybody</em> on that list because the US hasn't given any evidence to our allies. As I and others have stated before, the evidence wouldn't be covert material. Any evidence would be embodied in the products themselves and easily discovered given governments' resources.</p>

      • Stooks

        23 August, 2019 - 4:14 pm

        <blockquote><em><a href="#451311">In reply to skane2600:</a></em></blockquote><p>Ummm OK "skane2600" of thurrott.com comments section. Hey wait is that the CIA or NSA calling your phone so you can give them an update on your latest Intel?</p><p><br></p><p>If the US or its allies had intelligence that China was doing something nefarious via Huawei that they would simply tell the world about it?</p>

        • skane2600

          23 August, 2019 - 6:25 pm

          <blockquote><em><a href="#451317">In reply to Stooks:</a></em></blockquote><p>Do you intend to use that same lame joke on every comment you make on this topic?</p><p><br></p><p>European countries received warnings about Huawei from the US but if they received any evidence of from the US, it apparently isn't convincing since those countries haven't banned Huawei products. As I said "intelligence" is the wrong word to use, it's "evidence" that is important here and hearsay isn't evidence in a technical matter.</p>

        • karlinhigh

          Premium Member
          23 August, 2019 - 6:31 pm

          <blockquote><a href="#451317"><em>In reply to Stooks:</em></a><em> If the US or its allies had intelligence that China was doing something nefarious via Huawei that they would simply tell the world about it?</em></blockquote><p><br></p><p>I think it's useless to speculate about classified intelligence.</p><p><br></p><p>But if Huawei was known nefarious, surely the blacklisting would not be used as a bargaining chip in trade negotiations?</p><p><br></p><p>Every time there's a thurrott.com article that mentions the Huawei blacklisting, there are comments debating whether the USA or the PRC has the more righteous government. I think one factor that gets people engaged is that it feels like there's a double standard…</p><p><br></p><p>When the one of the USA or PRC does something, it sounds like the "other side" is saying that it's all kinds of BAD and that government should stop it immediately.</p><p><br></p><p>But when the other of the USA or PRC does something equivalent, it's <span style="color: rgb(33, 42, 48);">¯_(ツ)_/¯ because they're only doing what's expected of them.</span></p><p><br></p><p><span style="color: rgb(33, 42, 48);">Personally, I think every major intelligence agency will take advantage of whatever opportunities look good to them. And whatever info gets published about their work is likely either speculative or strategic.</span></p>

        • yangstax

          23 August, 2019 - 8:23 pm

          <blockquote><em><a href="#451317">In reply to Stooks:</a></em></blockquote><p>Huawei has filed a lawsuit in Texas to pressure U.S. Government to present all the evidences for the claims they have charged against Huawei concerning the security threats. Let facts to speak for themselves. It is very strange that U.S. has already banned the use of the Huawei equipment in the States. Then why U.S. still worry about the security issues on the equipment they don't have. It seems that the whole thing is a political game. Huawei is leading the 5G technology and owns most patents. U.S. just can't stand to let Huawei dominates the 5G network standards and calling the shots. "Can't beat them, destroy them". Huawei phone business became a victim.</p><p><br></p><p>Talk about spying and monitoring, NSA is simply the worst. According to Snowden, NSA has been spying and monitoring the whole world for over two decades, including 35 world leaders. U.S. has never tried to ban the use of Cisco equipment. Huawei is just a hardware manufacturer like Cisco. They are not the users or operators like NSA.</p>

          • Singingwolf

            23 August, 2019 - 8:55 pm

            <blockquote><em><a href="#451371">In reply to yangstax:</a></em></blockquote><p><br></p><p>And there you have it. The reason they don't want Huawei equipment is that they can't pressure China to add spying bits in Huawei equipment, while US and EU manufactures they can. As you said, the US are famous for hacking firmware and other bits to spy on and disrupt foreign interests. If Huawei was dominant, they significantly loose the attack surface.</p>

        • wright_is

          Premium Member
          24 August, 2019 - 11:01 am

          <blockquote><em><a href="#451317">In reply to Stooks:</a></em></blockquote><p>The UK and European spooks and governments have had full, unfettered access to the source code for Huawei for well over half a decade and they have found no backdoors, just poorly written code in some places. If there were actual backdoors in the code, the Europeans would be shouting it from the roof-tops and getting Huawei banned from their networks.</p><p>As it is, they are all saying there is no evidence that Huawei is an abnormally high risk – certainly no higher risk than using US kit; which is known to have been intercepted by the US TLAs and infected with their malware, in transit to friendly powers in the past.</p><p>So, what do I do? Buy expensive kit from the USA that I know could be infected or cheaper kit from China, whose code I can inspect and I know has no nasties, but the US says that it is bad?</p>

      • red.radar

        Premium Member
        23 August, 2019 - 6:12 pm

        <blockquote><em><a href="#451311">In reply to skane2600:</a></em></blockquote><p><br></p><p>what is strange is I have talked to engineers who have worked t companies who have been victimized by Huawei theft. Stories are detailed and personal. Strange thing is no one has come forward and made claims. </p><p><br></p><p>These are people I trust not random joe with a blog. These conversations are sincere so I don’t believe it’s made up. I believe Huawei is guilty if something but no one has formally charged them and there has been no trial so we are left in this purgatory of people believing what they want </p>

        • skane2600

          23 August, 2019 - 6:28 pm

          <blockquote><em><a href="#451356">In reply to red.radar:</a></em></blockquote><p>The issue here is whether there are backdoors in Huawei's equipment, not whether they are squeaky clean.</p>

          • PeteB

            23 August, 2019 - 9:23 pm

            <blockquote><a href="#451358"><em>In reply to skane2600:</em></a><em> </em>The issue here is whether there are backdoors</blockquote><p>That's what he, she, and/or they said </p>

          • bluvg

            26 August, 2019 - 12:20 pm

            <blockquote><em><a href="#451358">In reply to skane2600:</a></em></blockquote><p>That's <em>the </em>issue, according to <em>you</em>. That's not the <em>only</em> issue for others.</p>

        • chocolate starfish

          24 August, 2019 - 12:47 am

          <blockquote><em><a href="#451356">In reply to red.radar:</a></em></blockquote><p>We don't know these alleged engineers you have talked to nor do we know you. </p><p><br></p><p>So, do we believe a long respected tech reporter in Thurrott whose future success depends on him being trusted by readers or do we believe a random person posting a comment on an internet comment section?</p><p><br></p><p>I mean you no disrespect as I don't know you but I'll trust the one who has a known history of being genuine and trustworthy.</p>

        • wright_is

          Premium Member
          24 August, 2019 - 11:12 am

          <blockquote><em><a href="#451356">In reply to red.radar:</a></em></blockquote><p>While I agree that Huawei has allegedly stolen IP from US companies, that isn't the issue under discussion. The issue is whether Huawei kit has backdoors.</p><p>The US Government claims it has back doors.</p><p>The UK and European governments, <em>after having inspected the source code for over half a decade</em>, say there is no evidence of back doors.</p><p>Who are you going to believe? Those claiming something without any evidence, or those with the evidence saying there is no smoke, let alone fire?</p><p>Sloppy coding? Yes. Typical buffer overflow type bugs? Yes. Backdoors? No evidence.</p><p>As to the IP theft, that is how the US kickstarted its economy. What about Francis Cabot Lowell?</p><p>Under the Patent Act of 1793, the United States granted dubious patents to Americans who had pirated technology from other countries at the same time that it barred foreign inventors from receiving patents. “America thus became, by national policy and legislative act, the world’s premier legal sanctuary for industrial pirates,” <a href="https://books.google.com/books?id=PrprjW6zLHcC&amp;pg=PT31&amp;lpg=PT31&amp;dq=#v=onepage&amp;q=&quot; target="_blank">writes Pat Choate</a> in his book <em>Hot Property: The Stealing of Ideas in an Age of Globalization</em>. “Any American could bring a foreign innovation to the United States and commercialize the idea, all with total legal immunity.”</p>

          • terry jones

            24 August, 2019 - 12:20 pm

            <blockquote><em><a href="#451442">In reply to wright_is:</a></em></blockquote><blockquote>I wish there were an award for the wackiest Whataboutism of the year. 1793? There really is no stretch too far for you and your anti-americanism, is there?</blockquote><blockquote>You forgot to mention the southern states still had slavery in 1793.. That's usually a nice add-on for people like you.</blockquote><blockquote>Women couldn't vote in 1793 either.</blockquote><blockquote>If you have to go back 200 years to make a criticism, you might want to examine your real motives here.</blockquote><blockquote>Hint: This isn't 1793 </blockquote><blockquote><br></blockquote><p><br></p>

            • skane2600

              24 August, 2019 - 12:49 pm

              <blockquote><em><a href="#451457">In reply to terry jones:</a></em></blockquote><p>Please quote his anti-american comment. </p>

            • wright_is

              Premium Member
              24 August, 2019 - 2:30 pm

              <blockquote><em><a href="#451457">In reply to terry jones:</a></em></blockquote><p>I'm not anti – American.</p><p>I just call BS in this policy. Either Huawei is a security risk and you provide the evidence that they should be on the list and they are banned, end of story. </p><p>Putting them on the list without evidence and then giving them a reprieve is just theatrics. </p><p>As to the 1793 quote, Americans calling out China for organized IP theft is the pot calling the kettle black.</p>

          • yangstax

            24 August, 2019 - 1:26 pm

            <blockquote><em><a href="#451442">In reply to wright_is:</a></em></blockquote><p>If there are indeed IP theft cases, they should be substantiated in the court rather than making random claims in the media. </p>

  • PeteB

    23 August, 2019 - 9:21 pm

    <p>Haha, so a big middle finger to the fat orange baby in the white House </p>

    • terry jones

      23 August, 2019 - 10:12 pm

      <blockquote><em><a href="#451373">In reply to PeteB:</a></em></blockquote><blockquote>Does your Mom know you're on the internet?</blockquote><p><br></p>

  • noflames

    23 August, 2019 - 11:49 pm

    <p>Evidence Free and not knowing the evidence are two different things. Tell us what your evidence is that they are lying. The CFO was arrested, perhaps you can explain that since you are in the know. </p>

    • skane2600

      24 August, 2019 - 12:32 am

      <blockquote><em><a href="#451392">In reply to NoFlames:</a></em></blockquote><p>If you make a claim and you want others to believe you, you present your evidence. If you don't present evidence there's no basis for believing your claim. it really can't work any other way because not presenting evidence is indistinguishable from not having any. </p><p><br></p><p>In this particular case, the rights of US citizens are being restricted and so the government has an obligation to back up their claim with evidence particularly because the nature of real evidence in this case has no national security implications. Real evidence wouldn't come from covert informants but from engineers. </p><p><br></p><p>As far as the CFO being arrested is concerned, what she has been accused of has nothing to do with the issue here.</p>

  • PeterC

    24 August, 2019 - 4:33 pm

    <p>A 30% increase in home market sales speaks volumes when considering the Chinese Govt tech target of self-reliance by 2025….. </p>

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