Huawei CEO says underestimated impact of U.S. ban, sees revenue dip
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[June 17, 2019] By
HONG KONG (Reuters) - Huawei Technologies
Co Ltd's founder and CEO Ren Zhengfei said the impact of a U.S. ban on
the Chinese company was more severe than expected and warned that
revenue would dip to around $100 billion this year and the next.
This is the first time that Huawei has quantified the impact of the U.S.
action against the company and Ren's downbeat assessment comes after
weeks of defiant comments from company executives who maintained Huawei
was technologically self-sufficient.
Huawei had not expected that U.S. determination to "crack" the company
would be "so strong and so pervasive", Ren said, speaking at the
company's Shenzhen headquarters on Monday.
The United States has put Huawei on a blacklist that effectively bans
American companies from doing business with the Chinese firm, alleging
that Huawei's products could allow China to spy on U.S. communications.
The ban has forced companies, including Alphabet Inc's Google and
British chip designer ARM, to limit or cease their relationships with
Huawei's international smartphone shipments will drop 40%, Ren said on
Monday, without specifying a period. Bloomberg reported on Sunday that
the tech giant was preparing for a 40% to 60% decline in international
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Huawei founder Ren Zhengfei attends a panel discussion at the
company headquarters in Shenzhen, Guangdong province, China June 17,
2019. REUTERS/Aly Song
Huawei had reported revenue of 721.2 billion yuan ($104.16 billion) last year
and said a few months ago it expected revenue this year to jump to $125 billion.
"We did not expect they would attack us on so many aspects," Ren said but added
that he expects a revival in the business in 2021.
"We cannot get components supply, cannot participate in many international
organizations, cannot work closely with many universities, cannot use anything
with U.S. components, and cannot even establish connection with networks that
use such components."
Ren, however, said Huawei will not cut research and development spending despite
the expected hit to the company's finances and would not have large-scale
(Reporting by Sijia Jiang in Hong Kong and Brenda Goh in Shanghai; Writing by
Sayantani Ghosh; Editing by Himani Sarkar and Muralikumar Anantharaman)
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