Moscow, may 24 — “News. Economy” Analysts believe that the Chinese company Huawei has suffered from excessive sanctions the United States this year to cut supplies by a quarter, and face the possibility that its smartphones will disappear from international markets.
Smartphone shipments of Huawei, the second largest manufacturer in the world of mobile gadgets, can fall to 4-24% in 2019, if the ban, the United States will be saved, according to Fubon Research and Strategy Analytics.
Several experts said that is expected to reduce the supply of Huawei in the next six months, but declined to give a precise estimate because of the uncertainty associated with the ban.
The Commerce Department last week banned Huawei to buy goods in the United States against the background of growing trade disputes with China.
The ban applies to products in which 25% or more of the technologies or materials produced in the United States, and, therefore, could affect non-us firms.
Technology companies, including Google and owned by the SoftBank Group is a manufacturer of ARM chips, said it will stop deliveries of equipment and software for products Huawei.
“Huawei may disappear from the smartphone market in Western Europe next year, if you lose access to Android,” said Linda Sui, Director of wireless smartphone strategies at Strategy Analytics.
It predicts that shipments of phones will be reduced by another 23% next year, but believes that the company will be able to survive, staying in the huge Chinese market.
Fubon Research, which previously predicted that Huawei will put 258 million smartphones in 2019, now expects the company will ship a total of 200 million in the worst case.
According to IDC, Huawei’s share is almost 30% of the world market, last year the company delivered 208 million phones, half of them outside China. The company considers Europe the most important market for its premium smartphones.
Huawei says that the company is developing technology that will allow the company to be self-sufficient for many years. But experts do not believe, considering that the key components and intellectual property necessary for Huawei devices, it is impossible to find outside of the United States.
Maybe Huawei will have to fire thousands of people and “for some time, the company will cease to be a global player,” said Stewart Randall, an analyst at the Shanghai consulting company Intralink.
Analysts at brokerage and investment firm CLSA believe that Huawei have enough resources to keep the production of smart phones and telecommunications equipment for 5G-networks in the coming months.
According to experts, stocks of components in the smartphone business Huawei should last for a period of five to six months, and in the production of 5G equipment provisioning Huawei can achieve 9-12 months, told CNBC expert CLSA Sebastian Howe.
In CLSA believe that before the end of this year, Huawei will be able to ensure the smooth operation of their units for the production of smartphones and 5G equipment, although in the future fate of the company will depend on the outcome of trade negotiations, the US and China.
Also, in a research note, CLSA said that many may be underestimating the potential of the HiSilicon division, developing chips for devices Huawei. In the last few years opportunities HiSilicon has increased significantly. According to experts, HiSilicon can provide up to 80-90% of the requirements of Huawei.
However, analysts added that Huawei’s survival largely depends on whether they will continue to cooperate with the company TSMC, the world’s largest contract manufacturer of chips.
Until TSMC claim that the company supply products to Huawei is not subject to sanctions by Washington. The fact that U.S. export rules apply only to those products in which the share of American technology exceeds 25%. According to estimates by CLSA, semiconductor products TSMC, this figure varies between 15% and 20%, which allows the company to continue business with Huawei. However, CLSA does not rule out the possibility that Washington may tighten the rules.
In the case of the deterioration of the situation with Huawei, potential customers, phone companies will likely pass on the device Samsung Electronics and Apple Inc, and also buy mid-range phones from rivals OPPO and Vivo.
According to the analyst, Eugene Investment & Securities Lee sen Wu, if Samsung will be able to capture half of the annual sales of smartphones Huawei outside of China, which is estimated at 100 million units, it will receive an additional 1.35 trillion won ($1.13 billion) in operating profit. This amount is about 14% operating income mobile business of South Korean giant.
“Smartphones Huawei will quickly lose a share of foreign markets if sanctions from the suppliers will increase”, — the expert warns. He added that Samsung has a chance to “restore the pace of growth of its smartphone business, which has suffered from the rapid rise of Huawei”.
According to Counterpoint Research, in the first quarter of 2019 shipments of smart phones Samsung decreased by 8% year-over-year to 72 million units, while Huawei grew shipments by 50%, to 59.1 million devices. Although Samsung retained the market leadership with a 21% share, Huawei overtook Apple and took second place in the ranking with a record indicator of the presence of 17%.
However, us sanctions can play against Samsung, as a display division supplies panel for smartphones Huawei. If sales from the Chinese vendor will fall, will fall and revenues that Huawei provides Samsung.
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