Recently, the founder of Huawei – Mr. Ren Zhengfei in an interview on Bloomberg Television admitted that the sanction of U.S on Huawei can strongly affect the production line of them.
But he also affirmed that the sanction cannot destroy the smartphone business of this brand. And in future beside of developing their own software platform, looking for new suppliers, Huawei will also get back to the market and will even “not selling their products for the U.S”.
So, what makes Huawei so confident?
Market share in China
According to the South China Morning Post, after quarter I-2019 the market share of Huawei reached 34% per cent and leading the market. While other producers like Apple, Samsung and Oppo have a market share in turn: 11.5%, 1%, 19.6%. Moreover, Huawei has a plan to grow to 50% at the end of 2019.
The smartphone market of China recorded the amount of 1,1 billion mobile phone users and the market value of 66,8 billion USD with the increasing rate of over 15% each year according to Statista quarter IV-2018 report.
With the backing of the government, a high-value market share in the world’s largest mobile market (over 50% global market), and a very strong financial potential go with technology. The sanction move of U.S may activate the independence of Huawei and stimulate its innovation.
Plus, in recent years, the Chinese’s companies has succeeded in making people think back about internal technology products. Before, Chinese people always believe that local companies can only be good with low-end products or houseware products.
Political advantages
Although claiming that he’s not the politician, but Mr. Ren Zhengfei cannot deny that the rapidly growing of Huawei have a very tight connection with the Chinese government. In the past, the very first global contracts of Huawei to build the telecom infrastructure in Africa come from orders of government.
Recently, the allegations of U.S and its allies for Huawei spying activities via their 5G telecommunications equipment also prove the thesis about the relationship between Huawei and the Chinese government. You can learn more about Huawei history on Wikipedia.
The U.S’s sanction may slow Huawei’s production down but U.S and Europe are not the only ones have a technology to create chipset. One of the biggest competitor of the U.S and its allies – Russia is still silent since U.S-China commercial war begin. Huawei in particular and the Chinese government in general may get close with Russia, and this alliance is not what U.S and its allies may like.
Moreover, according to CafeF if China closes its gate with Apple in China, this brand will lose 1/3 its global sales. And stop providing services and devices to Huawei is also a large damning to the U.S and its allies brands.
With the taut situation of the China – U.S commercial war right now, no one can make sure anything.
Conclusion
Agree or not, the truth is that Huawei is still the biggest private company in China. The last year sales revenue reported of Huawei has over helm Alibaba and Tencent.
gree or not, the truth is that Huawei is still the biggest private company in China. The last year sales revenue reported of Huawei has over helm Alibaba and Tencent.
With all the advantage in finance, political and technology, the fall of Huawei is impossible. Not to mention that the Chinese government will not allow Huawei to fall, for millions jobs Huawei create for this country and the revenues from tax of this company.
But as I analysed in the previous article “President Trump’s sanction on Huawei and commercial war of U.S – China”, recover Huawei will be difficult and take a very long time for its present situation.
What do you think?