Smartphone-maker Huawei has undoubtedly been one of the biggest losers in the US Government's recent trade war with China, and in the wake of new restrictions the Chinese company has now reportedly reduced new-handset orders from its manufacturing partner Foxconn.
The communications giant was recently added to the United States’ “Entity List”, a move that has effectively stopped Huawei from doing business with any of its US-based associates, and which has significant implications for both the software and hardware used its future smartphones.
Various chipset manufacturers (such as Intel and Qualcomm) have ceased all dealings with Huawei, but perhaps more significantly, the phone-maker also won't be allowed to implement critical parts of the Android mobile OS that require access to Google-run services – which includes the likes of YouTube, Gmail and the Google Play Store, which is used to install and verify apps and games.
With the Chinese tech giant’s ongoing issues, it’s perhaps unsurprising that it has been reassessing its goal of becoming the world’s leading smartphone manufacturer by 2020.
Production reduction
A new report from the South China Morning Post (SCMP), citing people familiar with the matter, has stated that Taiwanese manufacturer Foxconn has “stopped several production lines for Huawei phones in recent days”.
The timing of the change strongly suggests this reduction is a response to the ongoing US trade ban controversy, although the South China Morning Post has conceded that “it is not clear whether the decreased production is temporary or part of a longer-term cut” and that “smartphone manufacturers have flexibility built in their production schedule”.
With Huawei overtaking Apple during Q2 of 2018 to become the world’s second-biggest smartphone maker, the company was hoping to topple the current leader (Samsung) by 2020.
According to the SCMP however, the president of Honor (a smartphone manufacturer under Huawei) stated at a media briefing in Shanghai that, “as the new situation has emerged, it is too early to say whether we are able to achieve the goal”.
It's unclear how severely the trade bans will affect Huawei in the long term, and it has stated it has long had plans in place to deal with such a ban – including stockpiling US hardware and even developing its own alternative to the Android mobile OS.
