Huawei: Survival will be our top priority
“Our whole-year earning jumps about 18% in 2019 to 850 billion yuan ($122 billion), lesser than our recent projections, as a trade boycott by the United States, restraining growth and disrupted our ability to source key parts,” said Huawei’s Technology.
The No 2 manufacturer of smartphones and the world’s biggest telecom network equipment developer, was banned by the US in May from doing any kind of business with US companies, not allowing them to access the technology like Google’s Android operating system.
The US government claims Huawei equipment causes national security risks as it can be used by the Chinese government to spy on users. Huawei has denied multiple times of its product about being a security threat.
Huawei’s Rotating Chairman – Eric Xu – revealed the showed the numbers in a New Year’s message to employees and customers in which he also predicts 2020 to be a “tuff year”.
“The firm was not able to develop as fast as it did in the first half of the year,” Xu said.
“Survival will be our top priority in 2020,” he added.
It’s 18% earnings growth forecast for 2019 is less than 2018’s revenue when Huawei’s annual earning rose to 19.5%.
The company may have failed to reach the fourth-quarter figures but, according to Reuters calculations establish on its recent statements, earnings in the quarter to end December 31 rose to 239.2 billion yuan ($23.3 billion), 3.9% increase from a year earlier and slower than the 27% increase it reported in the third quarter.
“The outer environment is becoming more complex than ever, and downward pressure on the global economy has boosted,” Xu said.
“In the long term, the US government will keep on surpassing the growth of development technology – a challenging environment for Huawei to survive and thrive,” he added.
Xu has also explained that Huawei had shipped 240 million smartphones this year, a 20% increase from 2018. The most smartphones of Huawei were sold that were launched before the ban.
The newest Mate 30 first went on sale in September, but it was not able to access a licensed version of Google’s Android operating system because of the trade problems.
Huawei would go all out in 2020 to build it’s Huawei Mobile Services ecosystem – as told by Xu – which understands the services such as cloud storage and an app gallery, describing it as “the base of our potential to sell smart devices in markets outside China”.
It’s also developing its own operating system known as Harmony, although analysts are doubtful that the system is a useable alternative Android.
Getting viral of the details about the dismissal and wrongful custody of a former employee reduced the reputation of Huawei.
In his letter, Xu said that they would continue to detach the ordinary managers and self-satisfied employees as Huawei needed to rid the company of complacency and that they would remove managers every year, performing in the bottom 10%.