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Huawei sets aggressive goal of 270 million phone shipments despite US ban: Exclusive

Krystal Hu
Reporter

SHENZHEN, CHINA — Huawei, one of the world’s largest smartphone makers, plans to ship 270 million phones this year, CEO Ren Zhengfei told Yahoo Finance in an exclusive interview.

The shipment, if achieved, would likely put Huawei ahead of Apple, which means the Chinese tech giant will become the world’s second largest phone maker measured by smartphone shipments (behind Samsung). Last year, the gap between Huawei and Apple in full-year smartphone shipments contracted to just 2.8 million units, the lowest point ever according to data from IDC.

The projected figure by Huawei’s CEO appears to be significantly higher than the company’s initial growth goal of 20%, and it showed unusual optimism at a time when the U.S. has put the company on its so-called Entity List, effectively banning U.S. companies from doing business with the Shenzhen-based firm. While Huawei does not disclose shipment figures, IDC data shows Huawei shipped about 206 million phones in 2018. This suggests that with 20% growth, Huawei would be shipping around 250 million phones this year.

President Donald Trump recently relaxed the restrictions on Huawei, but the lingering trade war between the U.S. and China still hangs over Huawei and its business. While the company says its 5G business is unaffected by China-U.S. tensions, the smartphone business is under more pressure. Huawei buys chipsets from Intel (INTC) and adopts Google (GOOGGOOGL) Android system on its smartphones. Both Intel and Google have applied to the Department of Commerce for a waiver to resume supplying to Huawei. While Huawei has its own chips, it hasn’t developed a substitute for the Android operating system, Ren said.

Huawei’s smartphone shipments crossed the 100 million mark in the first five months of 2019, according to the company.

Global smartphone marketshare

Analysts say the uncertainties are mounting, even as Huawei’s market share in China is rising. The most optimistic forecast by Ming-Chi Kuo, a high-profile analyst at TF International Securities, sets the annual shipment at 260 million, under the assumption that Huawei can regain Google Mobile Services (GMS) authorization for its new devices by the end of July.

“270 million is a very aggressive goal from what we’re seeing. It largely depends on how the U.S. sanctions change in the future,” said Jia Mo, a Shanghai-based analyst at Canalys.

More from Yahoo Finance’s exclusive interview:

Huawei CEO Ren Zhengfei: ‘Shutting Huawei out is the start of the US falling behind’

Huawei exec: ‘Google is still trying to supply to Huawei’

Krystal Hu covers technology and China for Yahoo Finance. Follow her on Twitter.

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