Technology giant Huawei has admitted its target to become the world’s top smartphone vendor by next year may be unrealistic after the US trade ban.

By Ian Horswill

Posted on June 3, 2019

Huawei has been forced to stop production of smartphones after US President Donald Trump banned trading with the Chinese multinational technology company.

A report by the South China Morning Post stated the halt in production was by Foxconn, “the Taiwanese electronics manufacturer that assembles handsets products for many phone brands including Apple and Xiaomi,” amid reduced orders for new phones.

Huawei had previously announced its target was to become the world’s top smartphone vendor by next year, but the stance by the US government has hit sales dramatically.

“As the new situation has emerged, it is too early to say whether we are able to achieve the goal,” Zhao Ming, president of Honour, a Huawei smartphone brand, told reporters. He was responding to questions about Huawei’s plan to beat Samsung Electronics in smartphone sales before the end of 2020.

The newspaper cited multiple “people familiar with the matter”, who were not named.

The company’s global smartphone sales swelled to 15.7 per cent in the first quarter of 2019 from 10.5 per cent in the same period last year, data from industry research firm Gartner stated.

The technology giant has previously acknowledged that it is speeding up efforts to develop its own smartphone operating system and app store in response to Trump’s administration adding the company to a trade blacklist.

The Huawei ban imposed earlier this month forbids US companies like Google from providing critical services to Huawei, and the move is expected to obliterate overseas demand for Huawei’s smartphones. Four major Japanese and British mobile carriers have said they will delay releasing new handsets made by Huawei amid the US-led crackdown.

Since the US move, some panicked Huawei users have started selling their brand new P30 smartphones on ecommerce sites at hefty discounts, out of fear that a US ban could render their handsets useless without essential Google apps. This is despite Google issuing a statement that existing Huawei devices will continue to have access to its services.

The blacklist restricted the company from buying services and parts from US companies without approval, affecting access to a wide variety of American-made hardware and software by companies including Qualcomm and Google.

Japan’s Panasonic said it was halting business with the embattled brand, joining a growing list of firms distancing themselves.

“We’ve stopped all business transactions with Huawei and its 68 group companies … that are subject to the US government ban,” Panasonic spokesman Joe Flynn said last Thursday.

On May 10, 2019, Trump signalled the end of formal trade negotiations with China, hiking tariffs on US$200 billion worth of Chinese imports by 15 per cent to 25 per cent.

China then raised tariffs on US$60 billion of American goods, effective June 1.