Huawei reportedly prepares for 40% to 60% drop in overseas sales

The impact will be felt globally by its suppliers.

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Huawei, the world’s second-largest smartphone maker, is facing a 40% to 60% drop in overseas shipments due to its ban by the United States Department of Commerce, reports Bloomberg.

The Shenzhen-based company’s sales and marketing managers are crunching internal estimates of how badly their overseas market could be affected by the US ban, which led to Huawei not being able to install Google’s popular Android smartphone operating system on its devices.

Even though Huawei plans to release an operating system developed in-house as early as this fall and utilize its own integrated circuit design house Hisilicon, it may still see a drop of overseas shipments by 40 million to 60 million units this year, according to Bloomberg.

Huawei shipped 206 million smartphone devices worldwide last year, half of which went overseas, making it one of the largest clients for many US companies in the supply chain. Any contraction of Huawei’s smartphone shipments this year could heavily impact its suppliers’ profitability, which has already been gravely affected by the US ban.

The US government put Huawei on its “Entity list” last month, effectively severing business ties between the Chinese tech giant and its US suppliers barring government approvals.

US chipmakers that are among Huawei’s suppliers are reportedly lobbying the US government to ease the ban on their sales to the telecoms giant, according to Reuters. Huawei spent USD 11 billion buying from US firms including Qualcomm, Intel, and Micron.

Last Friday, Broadcom forecasted that the Sino-US trade war and the ban on Huawei could cost the company USD 2 billion in sales revenues this year.