The US ban on Huawei has been announced to cost the company $ 12 billion. Huawei’s revised 2019 revenue forecast was $ 135 billion.
It was announced last year that foreign companies, which are included in the black list announced by the USA as part of the trade wars with China, cannot use the technology developed by American companies without government permission. According to the decision made by Google’s parent company Alphabet, the Android software developed by Google will not be updated on Huawei phones after the ban, and these phones will not have access to Google Play, which enables the installation of the application.
Huawei initially thought that the ban would not affect the company much. Especially with the first trade agreement signed between the USA and China, the pressure on Huawei was expected to ease. However, the announcement by Huawei shows that the company lags behind 2019 revenue estimates.
He lost $ 12 billion:
Speaking to CNBC, Huawei Manager Eric Xu announced that 2019 revenue of Huawei was $ 123 billion. Revising its revenue expectation after the Google ban, Huawei had set a goal of $ 135 billion. According to Xu’s statement, Huawei is below $ 12 billion in 2019 expectations. Xu added that the reason for this was the US sanctions.
Xu said that the decline in Huawei’s revenues was largely due to a decrease in the consumer electronics division. Sales of the consumer electronics division accounted for 54% of the company’s total sales in 2019. This episode was ahead of the network equipment pen in 2018, making it the most revenue generating part of Huawei. According to Xu, the most affected part of Huawei from US sanctions was the consumer electronics department.
The revenue of this section, which consists of smartphones and laptops, is $ 66.93 million in 2019. This number is $ 10 billion less than Huawei’s expectations. However, Huawei’s both revenues and profits increased compared to the previous year. Revenues increased by 19.1% on a yuan basis, while profit rose by 5.65% on a yuan basis, but profit in 2018 was 25% and profit in 2017 was 28%.