United States sanctions against Huawei are expected to have an impact of more than $ 10 billion on revenue from the manufacturer’s cellphone division in 2019. Huawei has been banned from dealing with American companies since May, when it was blacklisted for companies that could threaten the security of states United.
The amount was published by Reuters and released by one of Huawei’s rotating presidents, Eric Xu, at an event to launch artificial intelligence chips in China. The losses are less than those initially estimated by the company: in June, founder Ren Zhengfei said that revenues could fall by $ 30 billion this year.
The company had a record turnover of US $ 105 billion in 2018, an increase of 20% compared to 2017. For this year, if the projections are maintained, Huawei will still have modest growth: before the sanctions, the forecast was to reach revenue between $ 120 and 125 billion in 2019. We will only know the truth in March 2020, when Huawei will publish its financial results for the period.
As long as the fight is not resolved, Huawei may do business with American companies in specific cases. In May, the Commerce Department granted a temporary license that would end on Monday (19), but which was renewed for another 90 days, until November 19, 2019.
The temporary license allows Huawei to provide maintenance and support for network equipment already operational; update Android on phones released by May 16, 2019; and get involved with bodies like ITU, 3GPP and GSMA for the development of 5G. For other activities, such as buying chips from Intel and installing mobile networks, Huawei needs to file a formal request with the US government, which will conduct the analysis with “presumption of denial”.
According to Eric Xu, the temporary license is of no importance to Huawei, as the company was fully prepared to deal with the sanctions. Meanwhile, the company confirmed that it will upgrade smartphones to Android 10, invest US $ 800 million to install a factory in São Paulo and demonstrated its first electronics with the new HarmonyOS, a smart TV.