HUAWEI is reportedly cutting phone production by more than half due to trade sanctions

At this point in time. HUAWEI is facing an uphill battle to keep its smartphone business alive, especially in territories outside China. In the face of US trade sanctions that don’t appear to be easing anytime soon, even forcing the company to sell its Honor sub-brand to a government-backed consortium. Now, a fresh report from Nikkei Asia suggests that HUAWEI might cut its smartphone production by more than half in 2021. To be specific, the troubled Chinese company has reportedly told its suppliers about a 60% reduction in component orders this year. 

“Huawei has notified suppliers that it plans to order enough components for 70 million to 80 million smartphones this year, according to people at multiple suppliers. The range represents more than a 60% decline from the 189 million smartphones Huawei shipped last year.”

The report adds that the smartphone component orders only cover 4G phones, as the company’s ability to source 5G components has been restricted by the US government trade sanctions. A lower phone production – coupled with shrinking demand for its phones that now lack essential Google services such as Play Store, Gmail and Google Maps – is a clear sign that the company will continue to lose more market share moving forward. 

Huawei rose to the first rank in global smartphone shipments by eclipsing both Samsung and Apple, but lost it to the iPhone maker by the end of 2020 . There have been rumors that HUAWEI might sell its flagship Mate and P series, but the company refuted those claims in a statement shared with Pocketnow soon after. 

HUAWEI is still kicking, but its troubles are not going anywhere soon

Huawei Mate X2
HUAWEI launched its latest foldable – the Mate X2 – earlier today.

The Chinese telecom giant continues to invest in smartphone innovation and launched its latest foldable – the HUAWEI Mate X2– earlier today, but the lack of Google services might prove to be a deterrent for buyers outside China, especially for a phone that costs almost three thousand US dollars. 

HUAWEI continues to be a force in the Chinese smartphone market, but for a brand that was once en route to challenging Apple and Samsung’s dominance across all price brackets and in terms of innovation too, it has suffered a serious setback in its ambitions due to trade sanctions, compounded further by the global semiconductor shortage.

While HUAWEI has legally challenged the US FCC labeling it a ‘national security threat, US nominee for Commerce Secretary Gina Raimondo recently said that she doesn’t see any reason as to why HUAWEI should not remain blacklisted.

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