The Washington PostDemocracy Dies in Darkness

Huawei says U.S. ban will cost it $30 billion in sales

June 17, 2019 at 8:03 a.m. EDT
Huawei founder Ren Zhengfei attends a panel discussion at the company headquarters in Shenzhen, China, on June 17. (Aly Song/Reuters)

SHENZHEN, China — The U.S. blacklisting of Chinese telecom giant Huawei will reduce the company’s sales by $30 billion over the next two years, Huawei chief executive Ren Zhengfei said Monday, comparing the company to a “badly damaged plane.”

Speaking at company headquarters in some of his first remarks since the ban, Ren said the U.S. penalty is causing Huawei’s cellphone sales outside China to drop by about 40 percent. Before the ban, Huawei was the world’s second biggest seller of cellphones and the largest seller of telecom network equipment, with annual revenue of about $105 billion.

The Trump administration last month barred companies from selling U.S. technology to Huawei, saying the company was “engaged in activities that are contrary to U.S. national security or foreign policy interest.” Administration officials say they fear Huawei could tap into and monitor sensitive U.S. communications through its network technology.

Ren denied any efforts or plans to spy and suggested the U.S. action was motivated by a desire to check a fast-growing Chinese company.

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“We realized when we reached a certain level there would be competition, but it didn’t occur to us the U.S. government would be so determined to take such extreme measures against Huawei,” Ren said during a panel discussion.

The U.S. tech ban caused some of Huawei’s software and parts suppliers, including Google, to stop selling to the firm. Google’s Android software was crucial to Huawei phones. Losing Android has made the phones less attractive in many markets, analysts say.

Washington also has pressured allied countries not to buy Huawei equipment and banned U.S. government agencies from acquiring the gear. And last year, the Federal Communications Commission announced plans to block U.S. telecom and Internet carriers from using federal subsidies to buy foreign equipment deemed to pose a security threat.

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Ren said the United States is also limiting the company’s cooperation with U.S. universities, some of which have cut research partnerships with Huawei in recent months.

“It’s okay that certain universities don’t work with us right now because there are so many other universities out there,” the Huawei founder said.

Ren said the company would regain its momentum and emerge stronger from the ordeal. He noted that Huawei’s phone sales continue to grow at a fast clip in China, where the company is the biggest supplier.

“There is no way we can be beaten to death,” Ren said.