After the various blows Huawei has suffered in the last two years, analysts expect the electronics company to face a tough year in 2021.
Analysts tell Reuters that lack of access to high-quality semiconductors keeps Huawei from rolling out a network upgrade in China. Meanwhile, the company is developing its own operating system.
Limited access to components
By 2020, the US has denied Huawei access to American companies and companies doing business with the United States. As a result, Huawei no longer has access to chip manufacturer TSMC, making it increasingly difficult for Huawei to obtain semiconductors.
In 2019, 54 percent of Huawei’s revenue came from its consumer branch, mainly smartphone sales. Currently, Huawei has difficulty getting parts, and the phones it can build are not allowed to run Google services. This makes the company’s phones a lot less attractive.
In order to save some of its smartphone sales, Huawei decided at the end of 2020 to split off the Honor branch. Honor is now completely independent of Huawei, which means that it does not have to meet the strict conditions to obtain parts.
According to analysts, Huawei will focus more on services such as cloud computing or IoT devices. However, such products will not compensate for the decrease in sales of smartphones and telecommunication services.
Analyst Dan Wang describes the situation as a death sentence for Huawei. However, he thinks it will not lead to a quick execution, but a “slow strangulation”. Huawei has not commented on the reports.