US ban bites into Huawei's profits as company warns of potential Chinese retaliation

[midian182]

What just happened? The US ban on Huawei is starting to have an effect on the Chinese giant’s bottom line. The company reported a 5.6 percent rise in profit last year, its smallest increase in three years, and warned that 2020 would be its most difficult year yet. Huawei also predicted that the Chinese government could hit back against the US.

In its annual report, Huawei revealed that its net profit for 2019 was 62.7 billion yuan (around $8.8 billion). The 5.6 percent YoY increase paled in comparison to the 25 percent jump from a year earlier, and was the smallest increase since 2016, reports Reuters. Its carrier business, meanwhile, saw its sales rise by just 3.8 percent.

Revenue for the year was up 19.1 percent to 858.8 billion yuan (about $121.billion). Growth for the first half of the year was at 23.2 percent, meaning sales declined throughout 2019, and things are expected to get worse in 2020.

"We will need to further adapt to the long-standing restrictions imposed by the Entity List, while also addressing the impact of the ongoing Covid-19 pandemic," said board chairman Liang Hua.

The Huawei P40, sans Google apps

The Trump administration added Huawei to an entity list in May 2019, preventing it from doing business with US companies without a government license. As a result, new Huawei phones, including the Mate 30 series and P40, lack Google's suite of apps.

It was recently reported that the US government could exacerbate Huawei’s problems by restricting the supply of chips, including those from TSMC, to the company. But the firm warned that such action would see retaliation from the Chinese government.

"The Chinese government will not just stand by and watch Huawei be slaughtered on the chopping board," said rotating chairman Eric Xu. "If the Chinese government followed through with countermeasures, the impact on the global industry would be astonishing. It's not only going to be one company, Huawei, that could be destroyed."

P40 image credit: Karlis Dambrans via Shutterstock

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https://www.techspot.com/news/84619-us-ban-bites-huawei-profits-company-warns-potential.html

 

[Jeff Re]

But they have nothing to do with the Chinese government... They're not spying so why would the government retaliate for them?

 

[Vulcanproject]

Chinese economic retaliation against the USA? Just looking at the reporting of government stances from dozens of countries I'm seeing a growing call for China to take more responsibility for the rapid spread of the virus. Huawei are just going to be another casualty when the reckoning comes. China has considerably fewer friends right now and can expect heavy pushback, worldwide.

 

[Uncle Al]

But they have nothing to do with the Chinese government... They're not spying so why would the government retaliate for them?

They are subsidized by the Chinese Government as admitted by their CEO before the Chinese Govt. clamped down on him ... then he changed his story to one of no support by the government. Remember, there is no free enterprise in China, they have their fingers into everything INCLUDING those US companies that do business there. And, as a number of US companies have found, the Chinese will steal your technology, build identical factories, then undercut you in the marketplace until you go out of business. Only the largest like GM are able to negotiate differently and who knows how long they will last before they meet the same fate.

 

[EClyde]

Let them

 

[dangh]

But they have nothing to do with the Chinese government... They're not spying so why would the government retaliate for them?

google, microsoft, intel and so on have nothing to do with the US government... So why US government dictates where should they do business?
And if the US government does that to protect the market, what's wrong with the Chinese government doing the same?

 

[mbrowne5061]

But they have nothing to do with the Chinese government... They're not spying so why would the government retaliate for them?

As much as I personally believe they are whole and part of the Chinese government, lets say it was Intel/IBM/Google getting bullied by China:

The US government would definitely go the mat for them, even if it meant doing damage to the world economy overall. Its just MAD, but applied to global trade instead of nuclear weapons. Somewhat ironic, since it was with fiscal policies and global trade that the Cold War was fought with, to prevent the usage of nukes.

 

[USAvenger]

What we're experiencing right now may already be Chinese retaliation...........

 

[Charles Olson]

This is exactly why Huawei has to bring the new OS to market !

Why is when Apple or Microsoft or Google collect data when using their os is just a privacy concern but when a Chinese company collects less data it's all of a sudden Spying ? What about the data that social media collects too ! People from all over the world think it's all right when an American company does it but not ok when a Chinese company does it !

 

[candle_86]

google, microsoft, intel and so on have nothing to do with the US government... So why US government dictates where should they do business?
And if the US government does that to protect the market, what's wrong with the Chinese government doing the same?

Because it contains technology that is controlled like encryption tech. Anything devoploped in America can be restricted to any other country if it poses a national security implication. That's why the F22 was never sold over seas.

 

[Mr Majestyk]

Chinese already retaliated with Covid-19.

 

[Yynxs]

"...As a result, new Huawei phones, including the Mate 30 series and P40, lack Google's suite of apps. ..."

Not quite understanding the downside of having literally no Google apps on your phone. This should be advertised as a premium feature.

 

[Top S]

As much as I personally believe they are whole and part of the Chinese government, lets say it was Intel/IBM/Google getting bullied by China:

The US government would definitely go the mat for them, even if it meant doing damage to the world economy overall. Its just MAD, but applied to global trade instead of nuclear weapons. Somewhat ironic, since it was with fiscal policies and global trade that the Cold War was fought with, to prevent the usage of nukes.

But Google has already been bullied by China, and the US government did absolutely nothing.

 

[Charles Olson]

Because it contains technology that is controlled like encryption tech. Anything devoploped in America can be restricted to any other country if it poses a national security implication. That's why the F22 was never sold over seas.

Wow you must be a bit paranoid if your personal data has all encryption on it ! So how does facebook and other social media work with your settings .... they gain no info from you ?

 

[Yynxs]

But Google has already been bullied by China, and the US government did absolutely nothing.

Google was not bullied by Emperor Xi. Google, Apple, along with a very long list of other American companies, politicians and nation state economies and companies simply said, "Show me the money" and China did. It's only in the past three years that anyone has said, "hey, the cost is too high", then done something about it. Quite a lot of the rage against the Administration in and by the press, the Congress, and the coastie techs is because their golden suckers were taken and they were shown their teeth were rotting away.

 

[Capaill]

Google was not bullied by Emperor Xi. Google, Apple, along with a very long list of other American companies, politicians and nation state economies and companies simply said, "Show me the money" and China did. It's only in the past three years that anyone has said, "hey, the cost is too high", then done something about it. Quite a lot of the rage against the Administration in and by the press, the Congress, and the coastie techs is because their golden suckers were taken and they were shown their teeth were rotting away.

Yes. We have known for well over a decade that manufacturing anything in China is a bad idea as they will steal it and manufacture their own versions, gradually increasing the quality to a point where they are better than you. Companies accepted that risk because it's a medium to long-term problem, offset by massive short-term profits. And now they are blaming China? Blame the CEOs who chose their Bugattis and mansions over America's future competitiveness.

 

[Toju Mikie]

I was really looking into Huawei phones. Unfortunately, they still don't sell a US version of their phones for now. They need to be allowed back in the US to sell phones.

 

[Yynxs]

Yes. We have known for well over a decade that manufacturing anything in China is a bad idea as they will steal it and manufacture their own versions, gradually increasing the quality to a point where they are better than you. Companies accepted that risk because it's a medium to long-term problem, offset by massive short-term profits. And now they are blaming China? Blame the CEOs who chose their Bugattis and mansions over America's future competitiveness.

Reminds me of letting google devs help you develop features for firefox or anything else.

 

[Yad]

Chinese already retaliated with Covid-19.

Thanks for the laugh.

 

[candle_86]

Wow you must be a bit paranoid if your personal data has all encryption on it ! So how does facebook and other social media work with your settings .... they gain no info from you ?

The government considers encryption a controlled technology. Yes my stuff is encrypted both my phone, laptop and desktop. In the event any are stolen my private data like bank info remains inaccessible.